NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4575A
SPONSOR: Kolb (MS) TITLE OF BILL: An act to amend the tax law, in relation to the
personal income tax rates; and to repeal certain provisions of the tax
law, relating thereto
PURPOSE OR GENERAL IDEA OF BILL: This bill continues the 2011 "Middle
Class Tax Cut" beyond 2015 by reducing the marginal personal income tax
rates on middle income taxpayers from 6.85% to 6.45% and 6.65%; indexing
the brackets and standard deduction to the rate of inflation, and elimi-
nating the tax table benefit recapture. In addition, this bill allows
the tax rate for higher income earners to expire as scheduled in 2018.
SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends Section 601 of the
tax law by reducing the marginal tax rate for married taxpayers, for tax
years beginning after 2017, with incomes between $40,000 and $150,000
from 6.85% to 6.45%; and with incomes between $150,000 and $300,000 from
6.85% to 6.65%.
Section 2 amends Section 601 of the tax law by reducing the marginal tax
rate for heads of household- taxpayers, for tax years beginning after
2017, with incomes between $30,000 and $100,000 from 6.85% to 6.45%; and
with incomes between $100,000 and $250,000 from 6.85% to 6.65%.
Section 3 amends Section 601 of the tax law by reducing the marginal tax
rate for single taxpayers, for tax years beginning after 2017, with
incomes between $20,000 and $75,000 from 6.85% to 6.45%; and with
incomes between $75,000 and $200,000 from 6.85% to 6.65%.
Section 4 amends Section 601-a of the tax law to make permanent the cost
of living adjustment.
Section 5 amends Section 614 of the tax law to repeal the adjusted stan-
dard deduction as the standard deduction will continue to be indexed to
the rate of inflation.
Section 6 amends Section 601 of the tax law by eliminating the tax table
benefit recapture for tax years beginning after 2017:
Section 7 contains the effective date.
JUSTIFICATION: Enacted during the Special Session in December 2011,
was a new temporary (taxable years 2012, 2013, and 2014) personal income
tax rate of 8.82% for higher- income taxpayers and reduced the tax rates
for middle-income taxpayers. Further, the brackets and deductions are to
temporarily be indexed to inflation. The 2013-14 Enacted Budget extended
these tax rates for three years, until 2018.
But on January 1, 2018, the tax rates and brackets will expire and
revert back to the tax rates that were in effect in 2008 (prior to the
enactment of the PIT surcharge); thus increasing taxes for middle income
earners.
This bill would make the tax rates in effect in tax years 2012-2017 for
married taxpayers with incomes between $40,000 and $2 million permanent
and eliminate the bracket and tax rate for married taxpayers with
incomes exceeding $2 million, while at the same time continue to index
the brackets and standard deduction to inflation. In addition, it will
eliminate the tax table benefit recapture for tax years beginning after
2017.
Tax relief must be provided to our struggling middle class on a perma-
nent basis, not through a temporary tax cut.
PRIOR LEGISLATIVE HISTORY: A.4575 (2013); Referred to Ways and Means
A.9404 (2012); Referred to Ways and Means
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: This act shall take effect immediately.
