In America, they say that only two things are certain: Death and taxes, with the former ironically providing the only reprieve from the latter in “the land of the free”.
To be fair, we’ve always been this way. We were only a glimmer of a thought of an independent nation when we launched British tea into Boston Harbor because we were annoyed. We soon fended off the most powerful military in the world in order to rid ourselves of their unjust taxes…but then spent the next two and a half centuries undoing all that hard work.
So, much like the wolf domesticated and bred down into the poodle, here we are watching some Americans give up more than half of their income to the government.
New York City’s ultra-high earners will soon have to pay a top marginal income tax rate of nearly 52%, the highest personal income tax hit in the U.S. That means — in theory, at least — that some of the city’s wealthiest residents could end up giving more of their paychecks to federal, state and local governments than they keep for themselves.
New York’s state senate on Tuesday passed a deal to raise the income taxes collected on those with annual earnings above $1 million. The tax hike for millionaires still must pass the state legislature’s lower house and be signed into law by Governor Andrew Cuomo, both of which now seem likely to happen. The higher tax rates will apply to all state residents making more than $1 million, but the city’s own local levies will make the Big Apple the highest tax locale in the country.
The bite comes as both New York City and state replenish their public coffers amid the pandemic. The also must adapt to changes under Donald Trump’s 2017 signature tax-cut law that effectively eliminated personal deductions of state and local taxes on federal income taxes by wealthier residents of New York and similarly high-tax states like Connecticut, California, Illinois and New Jersey.
The Big Apple had already been experiencing a mass exodus on account of other, liberal-leaning policies, and there is little doubt that this tax rate fiasco will push more and more New Yorkers away.
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