Assembly wants higher tax on wealthiest New Yorkers to close budget gap

[Auburn85 432]

Don't worry, if the federal government doesn't come through on allowing those tax cuts for the rich to expire, some sort of government will get them to pay.

http://www.pressconnects.com/apps/pbcs.dll...EWS01/803060356

ALBANY (AP) -- The Assembly's Democratic majority on Wednesday proposed a temporary increase in income tax paid by New Yorkers making more than $1 million a year.

The plan, expected to be in the Assembly's budget proposal next week, would raise $1.5 billion annually, said Dan Weiller, spokesman for Assembly Speaker Sheldon Silver.

The measure would raise the income tax from 6.85 percent to 7.7 percent for New Yorkers making more than $1 million a year. The first year's revenue would go to the general fund, which the state uses to fund most functions and from which it will need to fill a $4.8 billion deficit.

The second year's revenues would be split between the general fund and transportation needs. The last three years' revenues would be used for transportation costs, split between the New York City mass transit and the state Department of Transportation, Weiller said.

The proposal was supported in Wednesday's closed-door conference of the Democratic majority.

It evolved from a proposal by the influential Working Families Party, which is associated with the Democrats. The Working Families Party, however, had sought a graduated tax for New Yorkers making more than $250,000 a year. The revenue was estimated at $5.1 billion and half would have been devoted to property tax relief, which was expected to entice the Senate's Republican majority to support the idea.

"It's not done," said Dan Cantor, executive director of the Working Families Party. "There's still time here. The Senate at first blush will denounce this idea. Then perhaps they will realize they, in fact, favor reducing property taxes and some may be reasonable enough to find the proper way to do it."

Cantor sees his party's plan as providing relief for millions of taxpayers, while asking a very few who can afford it to pay a little more. But the party also has a barely concealed hammer: Its support or opposition can mean the difference in political races, including Assembly Democratic primaries, close races for the Senate Republicans hoping to keep a slim majority, and a governor low in the polls.

"We'll cross that bridge when we come to it," he said. "We've had a good alliance with the Assembly, but it's fair to say our people are pretty disappointed."

Senate Republican leader Joseph Bruno and Democratic Gov. Eliot Spitzer, however, had objected to the Working Families Party version of the measure earlier on Wednesday.

"We have no plans to raise the personal income tax. None," said Bruno. "Not one penny in new taxes."

"When you increase taxes, you deprive people of income that they can spend as they please for education, mortgages, to buy homes, cars, refrigerators, TVs, restaurants," Bruno said. "You affect the whole economy. I'm not sure that's a good idea."

Spitzer is calling for no increases in broad-based taxes in his $124 billion budget proposal. The budget is due by the April 1 start of the fiscal year.

"I have said that we should not raise taxes," Spitzer said. "That is something that we cannot afford to do. We are finally making New York state competitive. When I speak to executives and those who make the decisions about where to locate jobs, the idea that we would turn around at this moment and start raising taxes is the wrong way to go."

ok, with the tax cuts "the rich" pay about 35% in income tax. If the tax cuts expire, they'll pay around 39%

then, we're hearing of the Social Security cap being raised.