In the midst of a cause of Covid City escapeWith many workers unsure whether to return to their Manhattan offices, Albany’s best and brightest have decided to boost taxes on businesses while raising income taxes paid by New Yorkers to the highest rate in the country. Welcome to the latest installment on Progressives Who Got Wild.
The budget contract that Governor Andrew Cuomo cut with lawmakers this week raises the highest marginal state income tax rate from 8.82% today to 10.9%. Add in New York’s highest local tax of 3.88% and the total is 14.78%. Take a knee, California (highest marginal rate of 13.3%) and recognize America’s new tax king. Wall Street guys already emigrate to Floridawho has an income tax of 0%.
Mr. Cuomo’s budget deal also increases business tax from 6.5% to 7.25%. This affects many independent owners and will be another incentive to flee Manhattan. Both tax increases are sold as temporary “surcharges” that run through 2027 for income tax and 2023 for corporate tax. But the politicians in Albany used the same line when they passed the “millionaires tax” in 2009. Does Mr Cuomo think two decades are temporary?
The reason for the tax hike isn’t the pandemic or a loss of revenue. Mr. Cuomo aimed a gun at New York’s head last year and threatened to shoot unless Congress sent more money. He got the ransom he asked and more. The state will receive $ 12.6 billion in direct budget relief from President Biden’s $ 1.9 trillion Covid bill.
Mr Cuomo said these funds would “help offset the devastating loss of revenue caused entirely by the pandemic”. However, even before federal aid, state revenues are only 0.1% (USD 47 million) below those of the last fiscal year (April to February). That tiny void is none other than the more than $ 50 billion in federal aid that New York has received for schools, Medicaid, transit, and general home help since March 2020.