TAXES - New York State and Higher Rates on Top Earners

"Deal in Albany Would Extend Higher Taxes on Top Earners" by THOMAS KAPLAN, New York Times 3/19/2013

Excerpt

Congress dodged the so-called fiscal cliff in part by raising taxes on high incomes.  California voters addressed their state’s school budget troubles with a surcharge on big incomes.  And now Albany has decided to raise revenue with a high income tax rate for people with seven-figure incomes.

Gov. Andrew M. Cuomo and legislative leaders are finalizing a surprise deal to extend a high-tax bracket for the state’s top incomes.  The bracket, first approved by lawmakers in late 2011 as a temporary response to disappointing revenues, does not expire until the end of 2014.  But that year is an election year, and by deciding to renew the bracket now, Mr. Cuomo and lawmakers can avoid debating high tax rates while running for re-election.

Mr. Cuomo, who in 2011 described a new high tax bracket as a “short-term solution” to help the state weather a financial emergency, did not mention his desire to extend the new tax bracket when he publicly announced his budget proposal in January, or in the weeks since as he and his cabinet members have crisscrossed the state, promoting his spending plan to residents.

The Legislature has not held any hearings or debate about the tax proposal, and Mr. Cuomo’s office has declined to provide details while it is being negotiated.  The State Democratic Party has even broadcast television advertisements praising the lack of any tax increases in the spending plan that Mr. Cuomo proposed.

But the emerging deal follows similar actions in Washington and in other states to improve shaky balance sheets by generating more revenue from those with top incomes.  In its deal to resolve the so-called fiscal cliff, Congress agreed in January to raise taxes on individuals with incomes higher than $400,000 and couples with more than $450,000.  And in November, at the urging of Gov. Jerry Brown, California voters approved a temporary income tax surcharge on the state’s highest incomes.

While some states are moving in the opposite direction — seeking to eliminate income taxes in an effort to spur growth — others like New York are embracing the idea of generating more revenue from those who make the most.  Maryland raised income taxes on high incomes last year, and Minnesota is considering an increase this year.