ALBANY, N.Y. (CBSNewYork) — Huge tax cuts are on the way for millions of New Yorkers.
You might call this major legislative magic. Governor Andrew Cuomo and the legislative leaders have come up with a tax deal that somehow reduces taxes for everyone, but still raises nearly $2 billion in new revenue.
“Under this plan middle class families will pay the lowest tax rate since before I was born. It will be the lowest tax rate in 58 years,” Gov. Cuomo told CBS 2’s Marcia Kramer on Tuesday.
In an unusual address from Albany, Cuomo unveiled his new tax deal that includes tax cuts for everyone — 4.4 million middle class tax payers getting a break. But the more you make, the higher the rate you pay. Translation: the rich will pay more than everyone else.
“That’s what’s right and that’s what’s fair and that’s what New York deserves,” Cuomo said.
And even though everyone pays less, the state will still take in an extra $1.9 billion in revenue.
Here’s how it works:
* The old millionaires’ tax surcharge, which hit individuals making more than $200,000 a year and couples making more than $300,000 a year — with a rate of up to 8.97 percent, will be allowed to expire on Dec. 31.
* In its place a new tax code that taxes the rich — real millionaires — more than the rest of us.
* If you make over $2 million, your tax rate is just a tiny bit lower than the original surcharge — 0.15 percent.
* If you make $300,000 to $2 million, your tax drops to 6.85 percent.
Although the calculations are still being worked out, if you make $100,000 a year that could mean a savings of about $400.
“The additional revenue generated will make a significant difference to our state by helping to close the deficit. I think it’s fair. I think it will benefit all New Yorkers in the long run,” Cuomo said.
The agreement also calls for more casino gambling, if voters approve, and reducing the Metropolitan Transportation Authority payroll tax to help small businesses.
In the end, most New Yorkers will pay less, but the richest New Yorkers will pay a much higher rate, though a bit less than if the surcharge had stayed in place.
It’s the kind of bipartisan plan that’s winning fans, even among Republican lawmakers like Staten Island Assemblywoman Nicole Malliotakis.
“Everyone who earns less than $2 million will receive a tax cut under this plan; 99 percent of my district is going to get a tax cut,” Malliotakis told CBS 2’s Sean Hennessey.
Others said it’s about time.
“It seems like the past 10 years or so people making a lot of money have been getting more breaks,” said Hartsdale resident Paul Grower.
Hennessey found one Wall Street employee who thinks the plan could hurt the economy.
“I think it’s a bad idea to raise taxes on anybody. People who make more are generally the job creators,” James Tang said.
How do you think the proposed deal will affect you? Share your thoughts in the comments section…