There’s a growing debate over taxing the wealthy, but it comes with its own complications.
Mayor Zohran Mamdani, who ran on a platform of increasing taxes for those earning $1 million annually, now finds his allies in the Democratic Socialists of America (DSA) targeting a broader group. Their latest proposal suggests taxing married couples with a combined income of $500,000, essentially doubling down on the push for higher taxes on affluent individuals.
The DSA is organizing a “Tax the Rich” rally in Albany this Wednesday, advocating for legislation that proposes a 10% state income tax increase for couples filing jointly who make more than $500,000. The plan also includes a substantial 220% tax hike for the wealthiest, potentially positioning New York with the highest marginal tax rates in the nation.
“In New York City, a couple earning $500,000 isn’t considered wealthy. These are young professionals who are striving to manage the city’s high living costs,” remarked Assemblyman Michael Tannousis, a Republican from Staten Island. “This is about couples trying to cope with the financial demands of living in New York.”
The legislation, highlighted on the DSA’s “Tax the Rich” website and supported by Democratic Sen. Robert Jackson and Assemblyman Demond Meeks, aims to increase the tax rate for those earning over $500,000 from 6.85% to 7.5%. Those making over $700,000 would face an 8% rate, while incomes exceeding $900,000 and $1 million would be taxed at 9% and 10%, respectively.
Residents raking in more than $700,000 would be taxed at a rate of 8% while those making more than $900,000 and $1 million would pay a 9% and 10% rate, respectively.
The current top rate for joint filers is
- 9.65% for those making over $2.15 million,
- 10.3% for those making $5 million and
- 10.9% for those making $25 million.
But the DSA bill would boost rates and double the top rate for the highest-income earners to:
- 12.0% for incomes over $2 million
- 14% for incomes over $3 million
- 16% for incomes over $4 million
- 18% for incomes over $5 million
- 20% for incomes over $10 million
- 22% for incomes over $15 million, and
- 24% for incomes over $20 million
Single filers making more than $450,000 would see their rates jump at least 7.5% as high as 24% for those making over $20 million.
California has the highest state income tax rate at 13%, but wealthy residents in New York City already pay more when combining the state and city income tax of 3.9% — to more than 14%.
Combined with the city tax, the wealthiest New Yorkers would pay an income tax double that of California if the proposed hikes are approved â a move that would trigger an exodus of millionaires who pay property taxes and employ thousands, Tannousis said.
“These are the people who can afford to leave. That’s why `tax the rich’ is a misnomer,” he said.
Mamdani, who took office in January after a campaign where he promised a freebie-filled agenda that included free bus fares, recently threatened to raise city property taxes by 9.5% unless the state authorized an income tax hike.
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He has also proposed hiking the corporate tax rate â though Gov. Kathy Hochul has said she wonât raise taxes. Hochul is up for re-election this November and some critics have warned she could warm to a hike after facing voters on Election Day.
Steve Fulop, CEO of the NYC Partnership, said if the goal is a serious conversation about tax policy, the âpublic deserves clarity” after the latest high-income racket.
“In under two months weâve seen proposals to raise income, corporate, property taxes and now this,â Fulop said. âCalling this a tax on only the ultra-wealthy while it reaches households starting around $500,000 sends the wrong signal as New York City competes hard for jobs and investment.”
But Jackson and Meeks said the tax hikes are justified as high earners in the state are âundertaxed.â
“Unfortunately, New York is also the most unequal state in the nation,â the lawmakers said in their bill memo.
âThis is due in part because the tax system has not kept pace with changes in the economy, leaving the many high-earning professionals and wealthy families in this state undertaxed,â the memo added. âEconomic growth from recent decades has overwhelmingly benefited a small segment of elites, while inflation-adjusted wages have stagnated for the vast majority of working people since the 1970s.â
They insisted the tax hikes “do not burden the middle class.â
The DSA and comrades â with a minimum contribution of $10 to the group â are chartering buses into Albany from around the state Wednesday with plans for a âtakeoverâ of the state Capitol and march outside the complex.
“This is our moment to show Albany the power of working people, and to demand that the richest New Yorkers finally pay what they owe so we can fund a New York we can afford. You wonât want to miss it,â the DSA writes on its website advertising the event.
The group also lists a slew of partners âhelping planâ the march including unions such as the New York State Nurses Association and other lefty organizations including Make the Road NY, Housing Justice for All, Citizen Action of NY and the Working Families Party.
DSA City Brooklyn Councilman Chi Ossé is slated to deliver a keynote during the event.
Mamdani, who recently endorsed Hochul’s re-election but supports the tax the rich campaign, will not attend the rally.
