New York has the second most progressive distribution of federal income taxes among the 50 states, according to a new analysis from the Tax Foundation.
From the Tax Foundation’s Fiscal Fact:
Taxpayers earning more than $200,000 earned 40 percent of [New York] state’s AGI but paid 63 percent of the state’s federal income taxes. Indeed, they paid three times as much in federal income taxes as every taxpayer earning under $100,000 paid combined.
Connecticut had the most progressive federal tax distribution, with filers in the above-$200,000 bracket paying 66 percent while earning 44 percent of adjuste dgross income (AGI).
The Tax Foundation analysis is based on IRS data for federal individual income taxes paid in 2008. But New York State’s own personal income tax is similarly progressive, according to figures in the “Economic and Revenue Outlook” volume of the 2010-11 Executive Budget.
In 2007, the data show, New York taxpayers with AGI over $200,000 shouldered 63 percent of the state personal income tax liability while earning 49 percent of income (see the table on p. 192).
These high-income taxpayers have sustained large drops in their earnings over the past three years; nonetheless, as of 2010, the Executive Budget forecasts they will still pay 54 percent of the income tax while earning 35 percent of the total AGI. The ratio of state income tax tax liability to share of AGI for filers earning more than $200,000 will rise from 1.29 in 2007 to 1.54 in 2010, presumably as a result of the sharp temporary rate increases imposed by the state in 2009.
In 2011, the budget also forecasts, the highest-earning one percent of all New York taxpayers will generate just over 41 percent of income tax liability.
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