Assemblyman Ken Blankenbush today voiced his opposition to the proposed extension of the “millionaire’s tax”, in addition to proposals changing the income brackets.
“The millionaire’s tax is simply a tax on business, whether the taxing thresholds are set at $200,000 or $1 million. This tax is just one more reason why New York state is the most unfriendly state to do business nationwide,” said Assemblyman Blankenbush.
The millionaire’s tax, passed as part of the 2009-10 State Budget, temporarily imposed an income tax surcharge on “wealthier” New Yorkers by creating two additional income tax tiers from 2009 to the end of 2011. The first tier, imposed on income from $200,000 to $300,000, but below $500,000 depending on one’s filing status, increases the personal income tax by 14.6 percent. The second tier, imposed on all taxpayers with a personal income above $500,000, increases income tax by 20.9 percent.
“The so-called millionaire’s tax impacts the heart of our upstate economy: small-business owners—from dairy farms to mom & pop shops. At a time when the state needs to focus on economic development and retaining and creating jobs, this tax only serves to drive more business out of New York state,” added the assemblyman.
Assemblyman Blankenbush noted that individuals in higher income brackets often use their income to fund further business ventures, creating more jobs and generating more capital, which stimulates the economy. Increases in taxes in these higher income brackets will not only hurt businesses already in operation but will stunt this entrepreneurial spirit and the potential for new business growth.
In fact, according to the Tax Foundation, New York bears the second highest state and local tax burden and is last among 50 states for business-friendly climate.
When the tax was enacted in 2009, it was expected to generate $4 billion annually in additional revenue for the state, but this has not materialized.
Assembly Speaker Sheldon Silver has recently stated that he would extend the millionaire’s tax as part of the 2011-12 Budget, but raise the threshold from $200,000 to $500,000, or $1 million. Governor Cuomo has stated that there will be no new tax increases in the final enacted budget.
To increase revenue to the state, the assemblyman believes that more investment needs to be made in agriculture and economic development to stimulate the economy, as well as reform the state retirement system, reduce fraud and waste in government, and reorganize and consolidate government agencies.