Here’s some more evidence of how Gov. Cuomo’s 29 percent personal income-tax hike for top earners is a risky proposition for New York City.
In response to a request from City Councilman James Oddo, the city’s Independent Budget Office (IBO) has analyzed 2009 tax data to see who pays New York City‘s personal income tax.
The result? New York City’s top one percent — 34,612 individuals or families — made 33.8 percent of personal income in the city, or an average $2.2 million each.
They paid 43.2 percent of city personal-income taxes, or an average $75,416.
At least a few of these people could leave the city because the state’s new marginal-income tax rate — 8.82 percent on individuals with more than $1 million in taxable income, up from the 6.85 percent permanent rate — requires them to pay a combined 12.7 percent city and state rate. If so, the city will end up losing money.
Unlike Coumo, Mayor Bloomberg seems to understand that tax hikes aren’t the answer. So New York won’t be able to make up for at least some of the loss with a higher tax rate.
The state hurts the city in two ways: imperiling its tax base without addressing the spending problems that are behind high(er) taxes.
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