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December 6, 2011

New York moves to cut, keep millionaire tax

Like Maryland and other states New York has been levying a tax surcharge on high-income folks. New York's main income-tax bracket used to be 6.85 percent. But for the past three years couples' income of more than $300,000 was taxed at 7.85 percent. And couples' incomes of more than $500,000 was taxed at 8.97 percent.

Some in New York wanted to keep the millionaire tax. Gov. Andrew Cuomo disagreed, saying it would drive capital out of the state. Now he has mainly caved, agreeing with legislative leaders to reduce the rates a little but maintain the surcharge on higher incomes. They also agreed to lower rates for couples making less than $150,000. From the NYT:

Under the proposal announced Tuesday, for married couples filing jointly, income from $40,000 to $150,000 would be taxed at 6.45 pecent; from $150,000 to $300,000 at 6.65 percent; from $300,000 to $2 million at 6.85 percent, and over $2 million at 8.82 percent.

Changing the tax rates and brackets would allow the state to replace some, but not all, of the revenue to be lost when the so-called millionaires’ tax expires on Dec. 31.

Maryland's millionaire tax expired last year, but there is talk of reviving it.

Posted by Jay Hancock at 6:19 PM | | Comments (2)
Categories: Taxes
        

Comments

Angry because the answer to many of our economic problems are fairly simple.
Do not allow people to be on welfare for longer than necessary.
We have families that have been on the dole for generations. Families that teach their kids to do the same.
Public union contracts that are a joke. These, fostered by politicians in bed with union leaders.
Stop the crap and allow working people to keep their own money.

The "millionaire's tax" is likely not driving millionaires out of Maryland. See here: http://bit.ly/tOoCfZ

See a similar studies with respect to the California income tax: http://bit.ly/tRFBGv and the effect of New Jersey's "half-millionaire" tax here: http://bit.ly/s6iBi2 where it is concluded that: "We find that the new bracket has marginally increased the out‐migration of half millionaires presently residing in New Jersey. We also find that, under a very conservative estimation procedure, the new bracket may have reduced potential half‐millionaire in‐migration from other states. In the end, the new tax bracket has generated an average of $895 million in state tax revenues per year. We find that the opportunity costs of the tax rate increase—whether estimated in terms of half‐millionaire households or tax base—are small."

(Query: What exit did the NJ immigrants come from?)

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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