And while it doesn’t involve extending the millionaire’s tax, it does involve raising taxes on the very wealthy, at least temporarily.
This news just came out a few minutes ago via a press release from Governor Andrew Cuomo’s office, but the New York Times has a nice summary here.
Essentially, the deal will create several new tax brackets–the newly- implemented top bracket expires in December 31, 2014.
Those new brackets are shown in a handy table, below, from the governor’s press release. (PLEASE NOTE the figures in the table are comparing tax rates with the millionaire’s tax in effect, to those under the new deal, and that’s why it looks like almost everyone’s getting a tax cut.)
The new brackets would mean that every married-filing-jointly couple (so romantic!) that makes less than $300,000 will get a tax cut. And couples making more than $2 million–such as the Monopoly man and Mrs. Monopoly–will pay about 2% more (See the NYT article for a little more nuance on this).
Interestingly, it appears the top “middle class” tax bracket–couples making between $300,000 and $2 million a year–will be the ones to see their tax rates drop most significantly. Under the existing code, they paid between 7.85% and 8.97%–now they’ll pay 6.85%. But that tax rate would have dropped back to 6.85% in any event, when the millionaire’s tax expires at the end of the year.
Those making less than $300,000 will see their rates drop less than .5%.
These numbers are difficult to parse, but I’m going by what’s in the press release. Here’s that information, keeping in mind the top bracket’s rate’s are dropping compared to their current (with-millionaire’s-tax) rates:
|Income Level||Previous Tax Rate||New Tax Rate|
|$40,000 to $150,000||6.85%||6.45%|
|$150,000 to $300,000||6.85%||6.65%|
|$300,000 to $2 million||7.85% – 8.97%||6.85%|
|Over $2 million||8.97%||8.82%|
As is clear, that increase in the top tax bracket’s rate won’t entirely replace the revenue that’s lost when the millionaire’s tax expires. But according to the press release, it will bring in $1.9 billion that would otherwise have been lost. Again, that top bracket expires at the end of 2014–and apparently the brackets would “increase with the rate of inflation.”
I’m sure we’ll be unpacking the complications of these new rules in the days, weeks and months ahead.