NYC’s ultra-rich face 52% combined top income tax rate, highest in U.S.
New York City’s ultra-high earners will soon have to pay a top marginal income tax rate of nearly 52%, the highest personal income tax hit in the U.S. That means — in theory, at least — that some of the city’s wealthiest residents could end up giving more of their paychecks to federal, state and local governments than they keep for themselves.
New York’s state senate on Tuesday passed a deal to raise the income taxes collected on those with annual earnings above $1 million. The tax hike for millionaires still must pass the state legislature’s lower house and be signed into law by Governor Andrew Cuomo, both of which now seem likely to happen. The higher tax rates will apply to all state residents making more than $1 million, but the city’s own local levies will make the Big Apple the highest tax locale in the country.
The bite comes as both New York City and state replenish their public coffers amid the pandemic. The also must adapt to changes under Donald Trump’s 2017 signature tax-cut law that effectively eliminated personal deductions of state and local taxes on federal income taxes by wealthier residents of New York and similarly high-tax states like Connecticut, California, Illinois and New Jersey.
New York’s wealthiest look for exits as state readies hefty tax increase
- The budget that was passed by state lawmakers in Albany and heading to Gov. Cuomo’s desk for signature would likely have New York City’s executives end up with combined local and state personal income tax rates that are higher than for wealthy California residents.
- “Moving to Florida is an active and serious conversation with my peers,” a media executive told CNBC. “If my kids weren’t here I would move tomorrow.”
New York’s top business leaders are gearing up for a potential mass exodus as Gov. Andrew Cuomo and state lawmakers prepare to raise their taxes.
With the state budget set to increase the personal income tax on the wealthiest New Yorkers as well as hiking corporate taxes, some executives who fled the city for Florida temporarily due to coronavirus pandemic lockdowns are considering permanent relocation, according to business leaders briefed on the matter.
Wealthy business leaders who have historically resisted moving at least some of their resources to Florida or other less-taxed states explained to CNBC that they are now seriously reconsidering as working from home becomes the norm, allowing more flexibility.
Tracy Maitland, president of investment advisory firm Advent Capital Management, said that while he still loves his home base, he’s not ruling out departing.