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It looks very likely that the question of whether or not to extend a temporary income tax surcharge on New York’s wealthiest households will be a contentious issue as the budget process moves forward in the state.
New York Governor Andrew Cuomo released his budget plan this week. Sticking to his “no tax increase” campaign promise, Cuomo did not include any significant revenue-raisers and instead chose to close a $10 billion budget gap primarily with massive cuts to education and Medicaid spending.
As a New York Times editorial stated, “without additional revenue… the state’s most vulnerable citizens — the poor, the sick, the elderly and schoolchildren — will inevitably bear the largest burden.” The editorial endorsed extending the temporary personal income tax surcharge on the state’s wealthiest households, a move also supported by Democratic Assembly members and many advocacy groups who want to lessen the magnitude of proposed spending cuts.
The temporary high-income tax surcharge was enacted in 2009 to help address New York’s budget crisis at the time and is set to expire at the end of 2011. But, clearly, the budget crisis is not behind the state and the $2 billion the temporary tax would raise for the coming fiscal year and $4 billion in the following year could go a long way to protecting core state services. The surcharge applies only to married couples with taxable incomes over $300,000 a year ($200,000 for single taxpayers). These very same taxpayers will receive a significant federal benefit from the extension of the Bush tax cuts.
For the sake of ensuring all New Yorkers have access to affordable health care, quality education, and safe communities, let’s hope the state’s lawmakers can agree that their wealthiest residents can afford to pay a little more this year.