With the state on the cusp of finalizing a $212 billion budget, State Senate Deputy Majority Leader Michael Gianaris on Wednesday night defended a deal to raise taxes on wealthy New Yorkers, and rejected the notion that such a tax hike would cause an exodus from New York.
Speaking with Inside City Hall anchor Errol Louis, Gianaris argued that the real reason people leave states is due to a lack of funding for public services, health care, and infrastructure, not because of tax hikes on the rich.
“I don’t believe this notion that they’re all going to flee because we increase their taxes by a very nominal amount, in terms of their total net worth, [that it] will lead to some kind of exodus,” Gianaris said. “I think people will realize we’re in a historic calamity that we’ve been dealing with, and asking the people who are doing well to help us fund efforts to get out of it is wholly reasonable,”
Gianaris went on to emphasize that the tax hikes will impact only wealthy New Yorkers, and that middle-class workers may even see a decrease in taxes.
“If you’re not making over $1 million income annually, you’re not seeing a tax hike,” Gianaris said. “You’re likely getting a tax cut because the scheduled middle-class tax cuts that were passed a little while back were reinstated, so they’ll continue to go into effect.”
Breaking Down the State Budget Details
As of this writing, the state budget deal has passed the state Senate but is being debated in the Assembly. Among the details of the tax changes set to pass:
- New Yorkers making $1 million in annual revenue and joint filers earning more than $2 million in annual revenue would see their current state income tax rate rise from 8.82% to 9.65%.
- New Yorkers making between $5-25 million in annual revenue would see their tax rate increase from 8.82% to 10.3%.
- New Yorkers making more than $25 million would see their tax rate increase to 10.9%.
- The Corporate Franchise Tax Rate will increase from 6.5% to 7.25% for three years. Companies making less than $5 million in income will see their rate stay at 6.5%.
- The Capital Base Test will be reinstated at a rate of 0.1875%. This will exempt co-ops, manufacturers and small companies.
Middle-class New Yorkers will see tax cuts:
- People filing jointly in $43,000-$161,550 income bracket will see their income tax rates lowered from 6.09% to 5.97%
- People filing jointly in the $161,550-$323,200 income bracket will see their income tax rates lowered from from 6.41% to 6.33%
Critics of the tax increases on the wealthy argue that they are not necessary since the state is getting an injection of about $12 billion in federal aid to combat the coronavirus pandemic and the economic fallout its left in its tracks. But Gianaris told NY1 that the legislature’s focus is not just short term, and that taxing the wealthy is a key avenue to ensuring the state honors its commitments for years to come.
“We can’t fund our schools for one year and then have the federal money dry up next year and pull back on that commitment,” Gianaris said. “We needed a source of revenue that was recurring.”
The budget agreement would also generate revenue through the legalization of mobile sports betting, and would create a $2.1 billion fund that will provide one-time unemployment benefits to undocumented immigrants who lost employment or income during the COVID-19 pandemic.
