The fall in New York State tax revenues over the past year has been concentrated among wealthy taxpayers, the comptroller’s latest monthly cash report indicates.
Estimated personal income tax (PIT) payments for the month of April were down $2.9 billion, or 52 percent, from April 2008–accounting for fully three quarters of the $3.9 billion net decrease in total state tax receipts on a year-to-year basis. In fact, April’s estimated payments were the lowest since 2004.
Monthly PIT withholding receipts on a year-to-year basis were down $122 million, or 5.5 percent, reflecting the drop in employment among wage-earners. Most of the remaining decrease in total revenues could be traced to a decline of $768 million, or 38 percent, in PIT final payments — the amounts taxpayers owed when they filed their returns for 2008.
The estimated payments category is dominated by high-income households, including self-employed business owners, whose first quarterly estimated payment of the year was due on April 15. The next quarterly payment, due June 15, will reflect the full brunt of retroactive PIT imposed on high-income earners by the 2009-10 budget, including payments to make up for any “shortfalls” in the first quarter. The steep drop in final payments for 2008 is probably heavily weighted by capital losses among the wealthiest New Yorkers.
New York State’s latest April numbers for personal income taxes were worse than the previous record receipt drop during a comparable period in the wake of the 9/11 terrorist attacks and the 2000-01 fall in the stock market. In April 2002, year-over-year estimated personal income tax payments were down 36 percent, withholding taxes were up 4.6 percent and the final income tax settlement was down 33 percent from 2001.
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