The leader of the state Assembly unveiled a plan Tuesday to hike taxes on those earning $5 million or more annually while lowering rates for middle- and low-income families.
In response, the leader of the state Senate immediately rejected the idea of raising any tax rates.
Currently, New York’s highest income-tax rate, 8.82 percent, applies to singles earning more than $1 million annually (or couples earning $2 million). Assembly Speaker Carl Heastie would add two higher rates: 9.32 percent for those earning $5 million to $10 million; and 9.82 percent for those earning more than $10 million.
The change would generate a projected $1.7 billion in state tax revenue, according to Heastie (D-Bronx).
Big earners have been paying a higher tax rate than other New Yorkers since lawmakers imposed the so-called Millionaires Tax after the 2008 stock market meltdown. Gov. Andrew M. Cuomo and legislators renewed it in 2011, albeit at a slightly lower rate. They renewed it again in 2013, and it is set to expire in 2017.
Meanwhile, the Democrats propose lowering the tax rate for those making between $40,000 and $150,000 annually from 6.45 percent to 6.25 percent. And they propose raising the earned-income tax credit for those earning less than $40,000, from an average tax benefit of $641 to an average $750.
In a statement, Heastie said: “It is critical that we fight for a fair and progressive tax structure that reflects this commitment and leads us toward a future where working families have more of the income they need to achieve their goals.”
Heastie’s idea got a cold reception from Senate Majority Leader John Flanagan.
“Raising taxes? No,” Flanagan (R-East Northport) said. “That’s the last thing we should do.”
Flanagan said high taxes are driving people from the state and cited General Electric Co.’s decision to move its headquarters from Connecticut to Massachusetts, rejecting a bid from New York. He said big earners already pay a “hugely disproportionate share” of the state’s revenue from income taxes and said he planned to soon unveil a tax-cut proposal.
Cuomo, in his budget proposal, hasn’t called for addressing income-tax rates this year.