Assemblyman Charles D. Lavine (D-Glen Cove) announced the passage of new progressive tax code reforms that will reduce tax rates for 99 percent of New Yorkers and ensure a fairer tax code. In addition, the legislation will provide assistance to small businesses by significantly scaling back the MTA payroll tax and permanently eliminating that tax for small businesses with payrolls of $1.25 million or less per year. The legislation has been signed into law by Governor Andrew Cuomo.
Under this new plan, parochial and private schools will join public schools in becoming exempt from the MTA tax. In addition, small businesses with a payroll of $1.25 million or less also will now be completely exempt from the MTA tax, while businesses with payrolls between $1.25 million and $1.5 million will see their rate fall from 0.34 percent to 0.11 percent. Businesses with payrolls between $1.5 million and $1.75 million will now pay at a rate of 0.23 percent.
The new high-income tax bracket for households earning more than $2 million per year will raise nearly $6 billion in revenue over the next three years, which will be used to restore crucial funding for schools and healthcare, create jobs and pay down the budget deficit. The agreement will strongly benefit middle-class taxpayers by cutting income tax rates and indexing the standard state tax deduction to inflation, resulting in an additional gain for taxpayers each year.
A new 13 member Tax Reform and Fairness Commission will suggest long term changes to our tax structure, including income, sales and corporate taxes to make our system more fair and more competitive.
The bill also provides $50 million in flood recovery funds for upstate communities devastated by the hurricane and tropical storm and tax credits for businesses damaged by those natural occurrences. Still being developed is a plan to provide for important infrastructure repairs of our roads and bridges.
This bill is the first restructuring of the tax code in decades, and the result is a victory for middle-class and working families and small businesses across the state. This will make New Yorkers more confident in the functioning of our government which will be good for jobs and economic growth in New York State.