New York’s high-income earners facing big tax increase
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Everyone wants Wall Street moguls to pay for their sins. Cash-strapped New York state is moving closer to enacting a tax penalty on wealthy financiers -- although the non-financier well-off also will have to pay up.
From Bloomberg News:
New York Gov. David Paterson agreed with legislative leaders on a budget plan that calls for higher income taxes on households earning more than $300,000, according to a person familiar with the negotiations. New York, the third-largest U.S. state, faces a deficit of at least $16.2 billion for the year beginning April 1, as the economic recession and layoffs on Wall Street cut tax collections. The tentative resolution was reached Saturday during discussions between Paterson, Senate Majority Leader Malcolm Smith and Assembly Speaker Sheldon Silver, the person said. The higher tax rates are proposed to end after three years. Joint-filers earning more than $300,000 would pay a top 7.85%, and those earning above $500,000 would pay 8.97%, the same top rate as neighboring New Jersey, the person said. The possibility that a higher tax rate would lead wealthy New Yorkers to leave the state was debated in the months leading to the budget agreement.
New York’s current maximum tax rate is 6.85% for joint filers with adjusted gross incomes above $40,000.
California is taking a more egalitarian approach to plugging its budget hole: Everybody will pay more.
The budget deal Sacramento reached last month will mean an across-the-board increase in personal income tax rates effective with this tax year, as my colleague Eric Bailey reported in this update Saturday. The rate in each tax bracket will rise 0.25 of a percentage point.
The new top tax rate for 2009 will be 9.55%, up from 9.3%. The top rate kicks in at taxable income of $94,110 for joint filers and $47,055 for singles.
There’s also a 1 percentage point surtax on Californians making more than $1 million. That surtax was approved by voters in 2004 to fund mental health services.
-- Tom Petruno