New York State levied a millionaire’s tax in 2009, just as the financial crisis and the ensuing recession hit. It brought in $4 billion annually to the state’s coffers just as tax receipts were drying up. With the tax slated to expire this year, Gov. Andrew Cuomo wisely called for extending it in his executive budget. The bad news is that Republicans in the state Senate would like to see the tax die.
Without this tax on the state’s wealthiest residents, a huge hole will be blown in the state budget. Public schools expecting a significant increase could face funding cuts instead. We need state school aid to lower class sizes, provide extra support to students with disabilities and English language learners, and expand STEM and other academic offerings in our schools. Losing the millionaire’s tax would also torpedo the governor’s plan to offer free tuition at CUNY and SUNY in the future to the students who attend our public schools now.
Asking the wealthy to pay a higher income tax rate is simply a matter of fairness. The Fiscal Policy Institute found the top 1 percent pays a smaller share of its total income in state and local taxes put together than lower- and middle-income families. Tax rates for New Yorkers with incomes under $100,000 range from 10.4 percent to 12 percent; the richest 1 percent pay only 8 percent. (We might find that Trump paid nothing if he ever releases his tax returns.)
Our state’s richest residents have multiplied their wealth while most New Yorkers have struggled to make ends meet with stagnant salaries and rising housing costs. The super-rich have seen their wealth grow exponentially. According to data from the Fiscal Policy Institute, the top 1 percent’s share of total income in New York State has leaped from 12 to 32.4 percent since 1990.
That’s why not only extending but enhancing the millionaire’s tax makes sense: The state Assembly leadership has proposed new tax brackets for the highest earners — those earning from $1 million up to $100 million annually — that would raise an addition $5.6 billion a year. These mega-earners can afford it.
The millionaire’s tax affects relatively few people, but benefits the large majority of New Yorkers. Those who are doing better than ever should pay their fair share toward the health and well-being of the place they call home.