There’s a push for taxing higher earners, but it’s a bit complicated.
Mayor Zoran Mamdani has advocated for increased taxes on individuals earning $1 million annually. Yet, his fellow members of the Democratic Socialists of America (DSA) are considering more extensive measures that could impact many married couples in New York.
The DSA is organizing a “Tax the Rich” rally in Albany on Wednesday to advocate for a bill proposing a 10% rise in state income taxes for married couples who jointly earn over $500,000. If passed, this would represent an astonishing 220% increase, making New York’s tax rate the highest in the U.S.
Rep. Michael Tanoussis, a Republican from Staten Island, argues that a couple earning $500,000 isn’t necessarily rich in New York City. “We’re talking about hardworking young professionals,” he noted. “It’s tough trying to manage the city’s expensive living costs.”
The proposed bill from DSA, backed by Democratic Senator Robert Jackson and Representative Demond Meeks, aims to elevate the tax rate for those earning over $500,000 from 6.85% to 7.5%.
For individuals earning more than $700,000, the rate would be 8%, while those making over $900,000 and $1 million would see rates of 9% and 10%, respectively.
The existing top tax rates for joint filers are as follows:
- 9.65% for incomes above $2.15 million;
- 10.3% for those earning $5 million;
- 10.9% for earners at $25 million.
Under the DSA’s proposal, the tax rates would escalate significantly for the highest earners:
- 12% for income exceeding $2 million;
- 14% for incomes above $3 million;
- 16% for those over $4 million;
- 18% for incomes exceeding $5 million;
- 20% for $10 million or more;
- 22% for those over $15 million;
- 24% for incomes above $20 million.
Individual filers earning more than $450,000 would face at least a 7.5% tax, climbing as high as 24% for those above $20 million.
Currently, California holds the highest state income tax rate at 13%, but wealthy residents in New York already pay a combined state and city tax exceeding 14%, including a city tax at 3.9%.
If the proposed tax hikes go through, the richest New Yorkers could be paying double the state income taxes compared to California. This could result in a mass departure of billionaires from the city, as they might seek to avoid the higher taxes, losing valuable property taxes and jobs they provide, according to Tanoussis.
“These individuals are capable of leaving the country. That’s why taxing the rich isn’t the right approach,” he said.
Mamdani, who assumed office in January touting various free programs, has also hinted at a potential 9.5% property tax increase unless the state agrees to elevate income taxes.
Additionally, he has suggested raising the corporate tax rate, although Governor Kathy Hochul has stated she’s against tax hikes. Hochul, currently seeking re-election, may face pressure to reconsider her stance post-election.
Steve Fulop, CEO of the NYC Partnership, expressed that to discuss tax policies effectively, clarity for the public is essential, especially following the backlash against taxing high-income individuals. “We’ve proposed increases across income, corporate, and property taxes, and now those proposals are here,” Fulop said, adding that branding it a tax only on the ultra-wealthy sends a misleading message, suggesting it affects households earning nearer to $500,000.
Jackson and Meeks maintain that the tax increase is warranted because many high earners in the state are “underserved” by the current tax system.
“New York is the most unequal state in the nation,” they mentioned in a bill memo, arguing that the tax structure hasn’t adapted to economic changes, leaving numerous affluent individuals and families under-taxed.
They claimed that the tax increases wouldn’t negatively impact the middle class.
The DSA, along with its supporters, plans to contribute at least $10 to the cause and has organized a “takeover” of the state Capitol, hoping to rally many supporters from all over the state on Wednesday.
“We want to show Albany that working people are strong and to ensure the wealthiest New Yorkers contribute their share—so we can fund a New York that works for everyone,” the DSA stated on their event promotion page.
Additionally, the group is coordinating with various partners such as labor unions and leftist organizations for support during the march.
DSA Brooklyn City Councilmember Chi Ossé is set to be the main speaker at the rally.
Though Mamdani has backed Hochul’s re-election campaign, he also endorses the tax the wealthy initiative and will not participate in the rally.
