Cuomo, state leaders agree to new tax code

A new state tax code has been agreed upon by Gov. Andrew Cuomo and legislative leaders.

A new state tax code has been agreed upon by Gov. Andrew Cuomo and legislative leaders.

In the face of a $3.5 billion deficit for the next fiscal year, Cuomo has pushed forward temporary changes to the tax code that could generate $1.9 billion in revenue. The agreement continues most of the previous “millionaire’s tax,” but also includes a middle class tax cut worth $690 million.

The changes in the personal income tax code are accompanied by $1 billion in infrastructure investment, $50 million in flood relief, a pledge from legislative leaders to support a casino gambling constitutional amendment, a reduction in the manufacturing tax rate and a reduction in the MTA payroll tax.

“We are investing in projects that will restore our state’s infrastructure and put thousands of people to work. We are cutting taxes on middle class New Yorkers and small businesses, which will inject nearly $1 billion into our economy. We are targeting new tax credits to hire inner city youth and reduce unemployment in some of the poorest areas of our state, as well as providing direct aid to communities struggling to recover in the wake of this year’s severe storms,” Cuomo said in a press release. “This would be lowest tax rate for middle class families in 58 years. This job-creating economic plan defies the political gridlock that has paralyzed Washington and shows that we can make government work for the people of this state once again.”

Households making between $40,000 and $150,000 previously paid 6.85 percent of their income to the state and now will pay 6.45 percent. Households making $150,000 to $300,000 were paying 6.85 percent and will now pay 6.65 percent. Households making between $300,000 to $2 million paid between 7.85 percent to 8.97 percent in state income tax and will now pay 6.85 percent. Households making more than $2 million a year paid 8.97 percent and will pay 8.82 percent.

The 7.85 percent and 8.97 percent rates that had applied to upper income earners as part of the temporary personal income tax surcharge, known as the millionaire’s tax, was set to expire on Dec. 31, 2011. These people will continue to pay higher rates for at least the next three years, with the highest bracket set to expire on Dec. 31, 2014.

The flood relief includes $21 million for small businesses, farms and non-profits that sustained damage that will not be covered by current federal, state or local programs. Additionally, there is $9 million for county flood mitigation or flood control projects and an additional $20 million in federal disasters declarations that will be distributed on an as needed basis.

A special session to address this legislation could occur as early as Thursday.

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Categories: Schenectady County

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