These Millionaires Are Begging New York State to Raise Their Taxes
A group of about 50 New York State millionaires, according to the Associated Press, have sent an open letter to Governor Andrew Cuomo and “legislative leaders” supporting higher taxes for the wealthy to fund programs to address income inequality and infrastructure investment. The group is backing a tax policy proposal from the Fiscal Policy Institute, a New York-based liberal think tank.
Recently, a small, but vocal number of wealthy people — including such notable billionaires as Bill Gates, Warren Buffett, Carl Icahn, and Charles Koch —have publicly raised concern about growing income inequality. Some have warned against creating a permanent underclass and indulging in welfare for the rich.
The signers of the letter for New York legislators include Abigail Disney, filmmaker and granddaughter of Walt Disney Company co-founder Roy Disney, fourth-generation Rockefeller family member Steven Rockefeller, At-a-Glance calendar developer and leveraged buyout pioneer Lewis Cullman, media private equality fund managing partner Leo Hindery, Jr., and Peter Strugatz, an early investor in Stonyfield Farm Yogurt and Zipcar.
The letter said they and the other millionaires were “deeply concerned that too many New Yorkers are struggling economically” and that “the state’s ailing infrastructure is in desperate need” of attention. They also wrote:
“As New Yorkers who have contributed to and benefited from the economic vibrancy of our state, we have both the ability and the responsibility to pay our fair share. We can well afford to pay our current taxes, and we can afford to pay even more.”
Governor Cuomo’s office did not respond to a Fortune query.
As the disparities in wealth and income have become more marked in the U.S., a small, but growing number of wealthy individuals have begun raising the alarm about income inequality.
According to the millionaires’ proposal, permanent tax law sets a gradually increasing state income tax rate through $40,000 and then a single rate of 6.85% on any amount above that. A temporary tax structure, set through 2017, decreases the rates for the $40,000 to $150,000 and $150,000 to $300,000 brackets to 6.45% and 6.65%. the 6.85% rate holds from $300,000 to $2 million a year. Anything over $2 million is now taxed at 8.82%.
The proposal would make the temporary rates for all brackets through $300,000 to $665,000 permanent. It would increase taxes on people making more: 7.65% on $665,000 to $1 million in income, 8.82% from $1 million to $2 million, 9.35% from $2 million to $10 million, 9.85% from $10 million to $100 million, and 9.99% over $100 million.
According to FPI’s estimates, the result would be an extra $2.2 billion a year, with 17% borne by out-of-state residents. If the tax rate is allowed to revert, the group claims the state would see a $2.7 billion revenue drop, even as taxes for moderate- and middle-income families, from $40,000 to $300,000, would increase a total of $1 billion. The richest 1% would pay a total of $3.7 billion less in taxes.
The chances of this proposal being enacted into legislation are low, notes the Associated Press. Democrats control the half of the legislature called the Assembly while Republicans have a majority in the state Senate. The Senate majority currently opposes increased taxes on millionaires, including a separate plan from the Assembly.
That plan would apply the 8.82% rate to incomes between $1 million and $5 million, according to WGRZ-TV. Those making between $5 million and $10 million would pay 9.32% and anyone making more than $10 million would pay 9.82%.
When Assembly Speaker Carl Heastie introduced the measure, Senate Leader John Flanagan said that he would oppose it. “Whether it’s income taxes, property taxes, business taxes, user fees, or tolls, we don’t support raising taxes or asking hardworking New Yorkers to dig deeper into their pockets to pay more,” Flanagan said at the time.
Legislators are currently negotiating details of a budget deal with the hope of reaching agreement by April 1, according to AP.