One-House Budgets Wisely Raise Taxes On Wealthiest New Yorkers — But Only Temporarily
Senate & Assembly raise corporate tax through 2026, raise personal income tax through 2027 — raising combined $2.2 billion
ALBANY, NY | March 12, 2024 — Following the release of the State Senate and Assembly One-House Budgets, Fiscal Policy Institute Director Nathan Gusdorf today released the following statement:
“In light of New York’s affordability crisis and the need for deeper State investments to lower the cost of living, the one-house budgets wisely invest in affordable housing, healthcare, and higher education. Additionally, the legislature sensibly rejects the Governor’s proposed cuts to public schools and home care worker wages.
“Both budgets prudently raise the top personal income tax and corporate tax rates to fund these investments, relying on increased revenue from those least affected by the affordability crisis. However, the budgets only increase taxes on the top 0.3 percent of taxpayers, and only on a temporary basis through 2027. The State’s long-term fiscal health would be better served by broadly increasing the progressivity of our tax system for all high earners on a permanent basis.
“Over the past four years, we have seen the importance of robust fiscal spending in the wake of the Covid-19 pandemic. New York’s fiscal base is stable and growing, and should be levied to strengthen the state’s economy and support working- and middle-class New Yorkers who currently face prohibitively high costs of living.
“The Governor should adopt the legislature’s increased investments and the revenue proposals needed to fund these essential public services.”
Background:
One-House Budgets – Personal Income Tax:
- Senate and Assembly both increase the personal income tax rates:
- For filers making over $5 million but not over $25 million: increases from 10.3% to 10.8%
- For filers making over $25 million: increases from 10.9% to 11.4%
- New Yorkers making over $5 million are 0.3% of taxpayers
- Both increases apply for tax years 2024 through 2027
- Total new revenue: $1.1 billion
One-House Budgets – Corporate Tax:
- Senate and Assembly both increase the corporate tax from 7.25% to 9%
- Increase applies for tax years 2024 through 2026
- Total new revenue: $1.1 billion
Tax increases on the wealthy do not cause out-migration:
- New Yorkers leaving the state at the highest rate make between $32,000 – $65,000 (an income group that has not seen any tax hike).
- Millionaires move out of New York State at one-quarter the rate of the rest of the population during typical, non-Covid years.
- After the two most recent effective tax increases (in 2017 and 2021), out-migration rates did not increase noticeably in response to the tax increases, and New York’s population of wealthy New Yorkers rose after those two effective income tax hikes.
- When New York’s high earners do move, they are more likely to move to other relatively high tax states: those making over $1 million have a 73% likelihood of moving to a high tax state.
The Fiscal Policy Institute is a nonpartisan, nonprofit research and education organization committed to improving public policies and private practices to better the economic and social conditions of all.
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One-House Budgets Wisely Raise Taxes On Wealthiest New Yorkers — But Only Temporarily
Senate & Assembly raise corporate tax through 2026, raise personal income tax through 2027 — raising combined $2.2 billion
ALBANY, NY | March 12, 2024 — Following the release of the State Senate and Assembly One-House Budgets, Fiscal Policy Institute Director Nathan Gusdorf today released the following statement:
“In light of New York’s affordability crisis and the need for deeper State investments to lower the cost of living, the one-house budgets wisely invest in affordable housing, healthcare, and higher education. Additionally, the legislature sensibly rejects the Governor’s proposed cuts to public schools and home care worker wages.
“Both budgets prudently raise the top personal income tax and corporate tax rates to fund these investments, relying on increased revenue from those least affected by the affordability crisis. However, the budgets only increase taxes on the top 0.3 percent of taxpayers, and only on a temporary basis through 2027. The State’s long-term fiscal health would be better served by broadly increasing the progressivity of our tax system for all high earners on a permanent basis.
“Over the past four years, we have seen the importance of robust fiscal spending in the wake of the Covid-19 pandemic. New York’s fiscal base is stable and growing, and should be levied to strengthen the state’s economy and support working- and middle-class New Yorkers who currently face prohibitively high costs of living.
“The Governor should adopt the legislature’s increased investments and the revenue proposals needed to fund these essential public services.”
Background:
One-House Budgets – Personal Income Tax:
- Senate and Assembly both increase the personal income tax rates:
- For filers making over $5 million but not over $25 million: increases from 10.3% to 10.8%
- For filers making over $25 million: increases from 10.9% to 11.4%
- New Yorkers making over $5 million are 0.3% of taxpayers
- Both increases apply for tax years 2024 through 2027
- Total new revenue: $1.1 billion
One-House Budgets – Corporate Tax:
- Senate and Assembly both increase the corporate tax from 7.25% to 9%
- Increase applies for tax years 2024 through 2026
- Total new revenue: $1.1 billion
Tax increases on the wealthy do not cause out-migration:
- New Yorkers leaving the state at the highest rate make between $32,000 – $65,000 (an income group that has not seen any tax hike).
- Millionaires move out of New York State at one-quarter the rate of the rest of the population during typical, non-Covid years.
- After the two most recent effective tax increases (in 2017 and 2021), out-migration rates did not increase noticeably in response to the tax increases, and New York’s population of wealthy New Yorkers rose after those two effective income tax hikes.
- When New York’s high earners do move, they are more likely to move to other relatively high tax states: those making over $1 million have a 73% likelihood of moving to a high tax state.
The Fiscal Policy Institute is a nonpartisan, nonprofit research and education organization committed to improving public policies and private practices to better the economic and social conditions of all.
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