Tag: state income tax

New York Taxes Go Skyscraper High

Mary Pat Campbell

Link: https://www.wsj.com/articles/new-york-taxes-go-skyscraper-high-11617834769

Excerpt:

The budget deal Gov. Andrew Cuomo cut this week with the Legislature lifts the top marginal rate on the state’s income tax to 10.9%, from today’s 8.82%. Add New York City’s top local tax of 3.88%, and the total is 14.78%. Take a knee, California (top marginal rate of 13.3%), and recognize America’s new tax king. Wall Street types already are migrating to Florida, which has an income tax of 0%.

Mr. Cuomo’s budget deal also raises the business franchise tax to 7.25%, from 6.5%. This affects many independent proprietors and will be another incentive to escape from Manhattan. Both of these tax increases are sold as temporary “surcharges,” running through 2027 for the income tax and 2023 for the corporate tax. But politicians in Albany used the same line when they passed the “millionaires tax” in 2009. Does Mr. Cuomo think two decades is temporary?

The reason for the tax increase isn’t the pandemic or a revenue shortfall. Mr. Cuomo last year pointed a gun at New York’s head and threatened to shoot unless Congress sent more money. He received the ransom he demanded, and more. The state is getting $12.6 billion in direct budget relief from President Biden’s $1.9 trillion Covid bill.

Author(s): Editorial Board

Publication Date: 7 April 2021

Publication Site: Wall Street Journal

They Came, They Saw, They Taxed

Mary Pat Campbell

Link: https://www.city-journal.org/ny-legislators-pile-on-tax-burden

Excerpt:

The New York tax burden is already punishing enough. New Yorkers pay a greater percentage of their earnings to the state than residents of any other state. The total tax burden, on top of federal taxes, amounts to 12.79 percent of income, according to a new study. Opponents of the latest tax increases claim that the state’s punishing rates are responsible for driving high earners and businesses away, and indeed the state consistently faced massive levels of net outmigration to other states even before the pandemic. That migration has included thousands of jobs in areas like financial services. Among the firms that have relocated significant jobs away from the city are Credit Suisse, Barclays, UBS, and AllianceBernstein, according to a recent Forbes article. Goldman Sachs has moved a big-money management division to Florida, and hedge fund manager Carl Icahn has decamped there as well. The Empire State’s taxes are one reason that former hedge fund manager Leon Cooperman said, “I suspect Florida will soon rival New York as a finance hub.”

Author(s): Steven Malanga

Publication Date: 6 April 2021

Publication Site: City Journal

Study: Graduated Income Tax Proponents Rely on Analyses That Exclude the Vast Majority Of “Millionaires” to Argue Their Case

Mary Pat Campbell
Study: Graduated Income Tax Proponents Rely on Analyses That Exclude the Vast Majority Of “Millionaires” to Argue Their Case

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Excerpt:

“Professor Young’s wealth migration analyses don’t capture the full breadth of tax flight by million-dollar earners,” said Andrew Mikula, co-author of “Missing the Mark on Wealth Migration: Past Studies Drastically Undercounted Millionaires.” “High-net worth households that do financial planning could move to another state before they sell million-dollar assets. They fly under the radar in Cristobal Young’s work because most of them don’t earn more than $1 million in the year before they leave.”

The graduated income tax proposal advanced by the Massachusetts Teachers Association, the Service Employees International Union, and other union, advocacy, and religious groups, defines earnings as including salary and capital gains on the sale of assets, which makes net worth a critical component of households subject to the tax.

Publication Date: 25 March 2021

Publication Site: Pioneer Institute

Sooner Or Later, The Supreme Court Will Be Forced To Decide The Tax Future Of 2 Million Workers

Mary Pat Campbell

Link: https://www.forbes.com/sites/lizfarmer/2021/03/18/sooner-or-later-the-supreme-court-will-be-forced-to-decide-the-tax-future-of-2-million-workers/

Excerpt:

New Hampshire and Massachusetts are fighting over whether the Bay State still has the right to tax the incomes of 103,000 former commuters now working from home in New Hampshire. But this tax spat deals with issues that spread far beyond the Massachusetts border — it has national implications and could impact millions of Americans.

Because of this, scores of tax organizations and states have filed briefs with the U.S. Supreme Court in support of the Granite State. In fact, an analysis by the National Taxpayers Union Foundation estimated at least 2.1 million Americans that previously crossed state lines for work are now working from home in accordance with public health guidelines.

Author(s): Liz Farmer

Publication Date: 18 March 2021

Publication Site: Forbes

Bipartisan Opportunism Is to Blame for California’s High Tax Rate

Mary Pat Campbell

Link: https://www.hoover.org/research/bipartisan-opportunism-blame-californias-high-tax-rate

Excerpt:

A current example of California’s bipartisan capitulation to public employees is OPEB—formally, “Other Post-Employment Benefits”—chiefly, health insurance for retired employees and their dependents costing the state $10 billion per year. Those benefits are provided even when the retiree or dependent has another job that offers insurance, is covered by Medicare, or is entitled to premium support from the Affordable Care Act.

No other state in America showers such subsidies on retired employees, who are already entitled to the highest pensions in the land. But both parties have been obstacles to OPEB reform because both fear retribution from government employee unions. If you have any doubt about that, check out donations to legislators on both sides of the aisle.

Author(s): David Crane

Publication Date: 12 March 2021

Publication Site: Hoover Institution at Stanford University

TRUST? ILLINOIS STILL REFUSES TO PAY ITS PENSION BILL.

Mary Pat Campbell
Trust? Illinois still refuses to pay its pension bill.

Excerpt:

Only the statutory contribution is not what the state owes to meet its obligation and prevent more debt. “Statutory” should be translated as the legislature made up a number and blew it out their collective butts.

The actuarial amount owed, the amount actually needed to keep from growing the liability is several billion more that the statutory amount.

They short the pension system every year, after year, after year, after year. And this year again.

Not exactly a trust-building thing, right?

Author(s): Fred Klonsky

Publication Date: 28 February 2021

Publication Site: Fred Klonsky

Speaker Emanuel ‘Chris’ Welch wants a graduated income tax do-over — this time tied to pension funding

Mary Pat Campbell

Link: https://www.chicagotribune.com/politics/ct-chris-welch-speaker-graduated-income-tax-illinois-20210224-fuzpz3fznrdwzpp7lhnhdlflue-story.html

Excerpt:

New Democratic House Speaker Emanuel “Chris” Welch suggested Wednesday that the state should again ask voters to approve a graduated-rate income tax, but this time target the new money toward paying down Illinois’ massive pension debt.

The call for a do-over came after voters in November overwhelmingly rejected Democratic Gov. J.B. Pritzker’s graduated income tax proposal. Opponents, including Republicans and business leaders, used distrust of Springfield to argue for keeping the state constitution’s flat tax requirement.

Author(s): DAN PETRELLA

Publication Date: 24 February 2021

Publication Site: Chicago Tribune

Albany progressives are trying to drive away job-creators with a massive tax hike

Mary Pat Campbell

Link: https://nypost.com/2021/02/28/albany-progressives-drive-away-job-creators-with-tax-hike/

Excerpt:

The Invest in Our New York Act is a package of six bills hiking state taxes by $50 billion a year. 

Numbers out of context are meaningless. Why not raise taxes by $200 billion, or heck, $90 trillion? But in the context of the New York state budget, $50 billion is an ­unprecedented hike. Without the pandemic and lockdowns, the state likely would have taken in $90 billion in taxes this coming fiscal year, meaning the bill’s proponents want to raise taxes by close to 60 percent. 

A sample of the new taxes: first, on high-income labor. A single filer with $1 million in income would see a 23 percent state tax hike, to 8.41 percent, up from 6.85. A filer making $10 million would see a 48 percent hike, to 12.14 percent, up from 8.82 percent. 

Author(s): Nicole Gelinas

Publication Date: 28 February 2021

Publication Site: NY Post

State Individual Income Tax Rates and Brackets for 2021

Mary Pat Campbell
State Individual Income Tax Rates and Brackets for 2021

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Excerpt:

Individual income taxes are a major source of state government revenue, accounting for 38 percent of state tax collections in fiscal year 2018, the latest year of data available.

Forty-two states levy individual income taxes. Forty-one tax wage and salary income, while one state—New Hampshire—exclusively taxes dividend and interest income. Eight states levy no individual income tax at all.

Of those states taxing wages, nine have single-rate tax structures, with one rate applying to all taxable income. Conversely, 32 states and the District of Columbia levy graduated-rate income taxes, with the number of brackets varying widely by state. Hawaii has 12 brackets, the most in the country.

Author(s): Katherine Loughead

Publication Date: 17 February 2021

Publication Site: Tax Foundation

Tax Hikes for High Earners Are on the Table in Some States

Mary Pat Campbell

Link: https://www.wsj.com/articles/tax-hikes-for-high-earners-are-on-the-table-in-some-states-11614162600

Excerpt:

Budgetary pressures vary greatly, despite calls for more federal aid in general and tax hikes in some locales. In New York, state revenue collected from April through December 2020 was 4.1% lower than in the year-earlier period, according to data from the Urban Institute think tank.

In New Jersey, the drop was 2.4%. With tax revenue outperforming earlier projections, Democratic Gov. Phil Murphy on Tuesday proposed making a full payment to the state’s pension system for the first time since 1996. California has done even better, with revenue collections growing 1.2%.

While a governor can call on lawmakers to raise taxes, the odds of success for the various proposals depend partly on which parties control state legislative chambers. Additionally, Democrats in Congress have pushed to include money for cities and states in an economic-recovery package, which could shift the equation.

Author(s): Karen Langley

Publication Date: 24 February 2021

Publication Site: Wall Street Journal

ILLINOIS HOUSE SPEAKER UNWILLING TO TAKE VOTERS’ ‘NO’ ON ‘FAIR TAX’ FOR AN ANSWER

Mary Pat Campbell

Link: https://www.illinoispolicy.org/illinois-house-speaker-unwilling-to-take-voters-no-on-fair-tax-for-an-answer/

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Excerpt:

Pension costs are already eating away at Illinois government services. The ballooning costs caused a nearly one-third cut since 2000 in core services such as child protection, state police, mental health and college money for low-income students.

Pension contributions accounted for less than 4% of Illinois’ general funds budget from 1990 through 1997 but have grown to consume 28.5% of the budget. Still, the pension debt has mushroomed to $144.4 billion by the state’s estimates, which more realistically was at an all-time high of $261 billion at the end of fiscal year 2020 according to Moody’s Investors Service calculations using more realistic assumptions. In any case, public pension debt is eating a larger chunk of Illinois’ gross domestic product than anywhere else.

Author(s): Adam Schuster

Publication Date: 25 February 2021

Publication Site: Illinois Policy Institute

Pritzker said the failure of his graduated-rate income tax would leave Illinois with two options. He’s eliminated both of them.

Mary Pat Campbell

Link: https://www.chicagotribune.com/politics/ct-jb-pritzker-illinois-budget-proposal-20210214-bjbay24vpvggfpg2urhbn4ojsy-story.html#new_tab

Excerpt:

Gov. J.B. Pritzker long warned that without his graduated-rate income tax, which voters rejected in November, Illinois would be left with only two options to address its chronic budget problems: raising income taxes or double digit across-the-board spending cuts.

But ahead of his budget address to lawmakers Wednesday, Pritzker outlined a state spending plan that would neither raise the income tax or alter the total budget outlay.

He did call for closing $900 million in unspecified “corporate tax loopholes,” which opponents are already labeling a tax hike on businesses in the middle of the coronavirus pandemic.

What remains to be seen is whether the governor will look to other avenues to increase revenue, although his options appear limited. He has opposed two of the leading options favored by some budget watchers: instituting a tax on retirement income and applying the sales tax to some services.

Author(s): DAN PETRELLA

Publication Date: 14 February 2021

Publication Site: Chicago Tribune