"Did New York Gov. Andrew Cuomo Really Agree To Raise Taxes On The Rich?"
It was widely celebrated earlier this week when New York Gov. Andrew Cuomo (D) appeared to strike a deal “to raise taxes on the wealthy and slightly reduce them for the middle class.” “The deal reflects the first restructuring of the New York tax code in years and will net an additional $1.9 billion in revenues for the state in 2012,” the Los Angeles Times reported.
But ProPublica’s Marian Wang points out that Cuomo didn’t really agree to raise taxes on the rich. For the past few years, millionaires in New York have been paying a 6.85 percent state income tax rate rate plus a special surtax. The controversy over Cuomo resisting taxing the rich at a higher rate revolves around this special “millionaire’s tax” that had been put in place before he came into office.
Under the agreement between Cuomo and the legislature, high income New Yorkers will no longer be paying the surtax, though their rate will be higher than it would have been if the surtax had simply expired. But at the end of the day, they will be paying less than they were when the surtax was in place — meaning that they are actually getting a tax cut.
In fact, Wang noted that “individuals making between $500,000 and $2 million will pay 2.12 percent less in state income taxes for 2012.” She demonstrated this with the following chart:
So while it is true that the rich will be paying more than they would if the previous “millionaire’s tax” had simply expired, they will also be paying less than if that tax had been extended and less than they paid this year.