surprise move this week, the NY state legislature is contemplating making permanent a “temporary” tax on the wealthiest New Yorkers.
What started as a temporary levy in order to cushion the financial downturn now faces permanence in the tax code. If continued indefinitely, the wealthy stand to pay 54% of their total income in taxes — more than half of their total earnings to the government.
Worse, Governor Cuomo is trying to characterize this change — which would violate his pledge against new taxes — as a tax cut, not a tax hike, because he says that the middle class will likely simultaneously benefit around $350 from it.
The tax “does not expire until the end of 2014. But that year is an election year, and by deciding to renew the bracket now, Mr. Cuomo and lawmakers can avoid debating high tax rates while running for re-election”
The extra levy, if made permanent, would serve several purposes:
“An administration official said the revenue generated by extending the top tax bracket would go toward unspecified tax cuts for middle-class families and small business. Among the tax cuts that Mr. Cuomo and lawmakers have agreed to are a $350 tax-relief check for families with at least one child, and a refundable credit for employers with workers under the age of 20 to offset an increase in the minimum wage”.
This is one to watch. If the tax does pass, you can be sure more wealthy New Yorkers will be leaving their state.