By now you probably know which way i would go with this...but does this seem fair or unfair?
Earn $1 Million a Year? Assembly Democrats Will Seek a Tax Rise Just for You
ALBANY — If you earn a million dollars in New York this year, beware. Albany has its eyes on your money.
As Democratic Assembly members try to figure out how to right the state’s finances, they are looking to the state’s fabulously wealthy — the hedge fund managers, real estate moguls and superstar shortstops — to balance the budget.
The Democrats will introduce legislation next week that would impose an income tax increase of nearly 1 percentage point for the next five years on anyone who earns more than a million dollars a year. Democrats estimated that the plan could bring in $1.5 billion in the first year alone.
The plan is certain to run up against rigid resistance by the Republican-controlled State Senate and Gov. Eliot Spitzer, who has repeatedly pledged not to raise taxes.
But Democrats are hopeful that it can attract broad support because it would focus on a small group of well-to-do New Yorkers. Some 26,000 New Yorkers have incomes higher than $1 million a year; of those, about 4,600 earn more than $5 million a year.
And they say the state needs to start looking hard for new ways to raise money because state revenues continue to soften with each passing day.
As part of their pitch, Democrats also plan to argue that as recently as 2003 the Legislature approved — over Gov. George E. Pataki’s veto — a temporary income tax increase for households earning more than $150,000 a year, which has since expired.
“The Senate’s already voted for this tax for people with incomes of $150,000,” said Assemblyman Richard L. Brodsky, a Democrat from Westchester County. “It should be no problem for them to vote for the same tax for people with higher incomes.”
But the Senate and the governor might not see it that way. On Wednesday, Joseph L. Bruno, the Senate majority leader, was unyielding in his opposition to higher taxes of any kind. His office issued a statement that said the thought of an income tax rise should “send shivers down the spine of every overburdened, hard-working New York taxpayer.”
Governor Spitzer was equally resolute. “That is not something that we can afford to do,” he said during a trip to Geneseo in western New York. “The idea that we would turn around at this moment and start raising taxes is the wrong way to go.”
The plan that the Assembly will take up next week calls for a new tax bracket. Anyone with income greater than $1 million would have all income taxed at 7.7 percent. Right now, their income is taxed at 6.85 percent, the state’s highest tax rate.
In the first year of the tax increase, all of the $1.5 billion in expected revenue would go into the state’s general fund. In the second year, the revenue would be split between the general fund and transportation projects, including upgrades to roads and bridges across the state and improvements to the Metropolitan Transportation Authority’s subways. In the third, fourth and fifth year of the plan, all revenue would go toward transportation.
Because of the money it would provide for transportation improvements, the plan would reduce the pressure on the Assembly to support Mayor Michael R. Bloomberg’s congestion pricing plan; revenue from congestion pricing would be used to finance transit projects. Sheldon Silver, the Assembly speaker, and many Assembly Democrats have voiced reservations about congestion pricing.
The Assembly plan differs considerably from another budget plan that is being promoted by the Working Families Party, which has gained influence among Democrats for providing critical support in important local races. That could put some Democrats in an awkward spot given the Working Families Party’s political clout.
On Wednesday, the party’s executive director, Dan Cantor, said he was disappointed that the Assembly’s plan did not include property tax relief and a tax increase on those earning more than $250,000, as the party has proposed.
“This doesn’t go far enough,” Mr. Cantor said. He said the party would continue pressing for its income tax increase and property tax relief plan.
Democrats who break with the Working Families Party on this issue could risk alienating a strong ally that has not shied away from challenging Democrats in primary races.
“You can never underestimate the Working Families Party’s ability to influence the political dialogue through the electoral process,” said Micah Lasher, who once worked as a political consultant to the party.
Mr. Cantor said he could not rule out running candidates against Democrats who oppose their plan. “We don’t know yet. It’s too soon to tell,” he said.
Some legislators said that it was far too early to predict what the Assembly’s tax increase plan would look like, and noted that it would most likely undergo several revisions before it has to be melded with the Senate’s budget on March 31.
“It’s a place to start,” said Assemblyman Darryl C. Towns, a Democrat from Brooklyn. “I think the Assembly is trying to start a conversation, and we’ll wait to see what our partners see in this.”
