Assemblymember Monica Wallace (D-Lancaster) announced that she helped pass the Assembly’s 2017-18 state budget proposal, which includes tax relief for small businesses and hardworking families across New York State.
“As Western New York’s economy seeks continued revitalization, we need to relieve the burden on hardworking taxpayers trying to make ends meet,” said Wallace. “The Assembly plan helps working and middle-class families keep more of their money in their pockets and gives small businesses much needed relief so they can expand and grow.”
Helping small businesses thrive
The Assembly budget proposal provides sizeable tax incentives for small and family-owned businesses that make it easier and more profitable to do business statewide. The income tax rate for small businesses with an income of $290,000 or less would be reduced from 6.5 percent to 4 percent for corporate tax filers. Personal income tax filers – such as sole proprietors, farmers and partnerships – would be able to deduct 15 percent of their income from their adjusted gross income (AGI) before the personal income tax rate is applied. This would lower the tax burden for over 1 million small businesses across the state, noted Wallace.
“Small businesses are the backbone of our economy – they encourage local commerce and create good-paying jobs for hardworking residents,” said Wallace. “By cutting their tax rate, we’re helping make sure small businesses thrive and create jobs right here in our community.”
In order to promote growing industries, the Assembly plan also doubles research and development tax credit percentages for qualifying research and development property.
“Businesses that invest in research and development are showing a commitment to innovation and moving our state forward, and it’s time we encouraged this economic boon,” said Wallace.
Providing tax relief for working and middle-class families
The Assembly’s proposal offers real tax relief for working families. It expands the Earned Income Tax Credit (EITC) from the current 30 percent of the federal credit to 35 percent. The EITC helps workers earning a low income reduce their taxes and keep up with the rising costs of living. The proposal also enhances the Child and Dependent Care Credit for taxpayers earning between $50,000 and $150,000. The credit is based on a sliding income scale for working parents who pay for child care or those who live with a spouse or dependent who is physically or mentally incapable of self-care.
“Working families are disproportionately hurt by rising costs of living and slow wage growth,” said Wallace. “These proposals provide relief for hardworking families and the challenges they face not only to get by, but also get ahead.”
To ensure fair, timely tax relief, the Assembly budget proposal fixes the state’s School Tax Relief (STAR) program so that all eligible homeowners receive deserved tax relief upfront as a reduction in their school tax bill.
The Assembly budget proposal also includes a visitability tax credit for homeowners who make improvements to their house that enhance mobility, such as wheelchair ramps and grab bars.
Expanding the state millionaires tax
The Assembly budget proposal institutes a more progressive tax code to increase funding for education, infrastructure and other critical programs. With the current tax code set to expire after 2017, the proposal includes previously approved middle-class tax cuts while re-establishing higher income tax rates for New Yorkers earning an income of more than $1 million.
Under the new tax structure, the state would generate $7 billion in additional revenue over the executive’s proposal over four years. The state millionaires tax was first implemented in 2009 and, despite warnings from critics that these increases would drive wealthy New Yorkers from the state, the number of wealthy taxpayers has actually increased.1
“The wealthiest New Yorkers have done extremely well in the past decade, and it’s only fair that we ask them to pay their fair share to help fund vital programs such as education, infrastructure repairs, and health care costs,” said Wallace.