Governor Andrew Cuomo held the press at arm’s length on Wednesday as he described the state’s tax plan going into the fiscal year 2022 which raises taxes in only two categories – a PIT (personal income tax) surcharge and a corporate franchise tax.
These two raise $2.7 billion and $750 million respectively to close the additional budget gap left by the COVID-19 pandemic and the $12.6 unrestricted federal aid provided through the American Rescue Act, according to Cuomo.
“There will be no capital gains tax. There will be no estate tax. The feeling was that those taxes would od damage to the state and actually cost the state more money than we would raise. The PIT top rates start from $25 million-plus. It goes 8.82 to 10.9, 5 to 25, 8.8 to 10.3, 5 million, 8.8 to 9.65. The corporate franchise taxes, $5 million-plus, 7.2. That is only in effect for three years,” Cuomo said.
But the embattled governor explained that taxes overall would decrease for New Yorkers if the State and Local Tax (SALT) cap is lifted on itemized deductions, something federal legislators have committed to repealing. This with the omission of a capital gains tax and estate tax from the state budget ensures, according to Cuomo, lighter levies from the government in the coming year.
Tax impacts could be reduced by 37% if SALT is repealed, according to the governor.
“These tax changes anticipate the repeal of SALT. When SALT is repealed, taxes net in New York State will be lower. Taxes net in New York State will be lower. That’s very important to remember,” Cuomo said. “Taxes go up? No. SALT will reduce the tax impact by 37 percent. When SALT is repealed, the taxes will be going down.”
Up to $2.4 billion will go to rental assistance and another equal amount will to landlords who Cuomo says will need money to pay their taxes.
“Landlords have to pay their taxes and their heat bill, et cetera. So $2.4 billion for that,” he added.
A relief fund for excluded workers and unemployed residents could move forward this year as well, pending a review from state Comptroller Thomas DiNapoli and Attorney General Letitia James as Cuomo anticipates the possibility of fraud from undocumented people in these categories.
“Support for excluded and unemployed workers, just because you are undocumented doesn’t mean we don’t care and we don’t have compassion, and we don’t want to help,” Cuomo said. “It is difficult to do it in a way that can be administered without fraud, and that’s obviously a major concern for us that we protect every tax dollar.”
Another facet in the budget Cuomo believes will benefit middle-class New Yorkers is a reduction in the personal income tax, which has the potential to put $2.2 billion back in 4.8 million people’s pockets.