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Thursday 1 December 2022
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NYS Assembly Announces Possible Tax Hike for Millionaires

nys assembly taxTax reform has been a major talking point leading up to the presidential election, and a recent proposal from local legislators could prompt considerable tax reform right here in New York State.

According to Syracuse.com, the New York State Assembly announced a proposal on Tuesday that would force millionaires to pay higher income taxes, while the middle class receives a minor tax break.

If the proposal is passed, individuals earning $1 million to $5 million would be required to pay taxes of 8.82%. Under the current taxation system, individuals earning $382,000 to $2.1 million pay 6.85% in income taxes.

The proposal would have an even greater effect on wealthier New York residents. Individuals earning $5 million to $10 million would pay taxes of 9.32%, while anyone with an income that exceeds $10 million would have to pay 9.82% in taxes.

The proposed tax hikes would raise an estimated $1.7 billion for the state. In total, about 56,000 taxpayers would pay an average of $33,000 more in income taxes.

“It’s a fair way to ask people to pay their fair share,” said Assembly Speaker Carl Heastie. “Someone making $5 million or $10 million a year, that’s a small sacrifice.”

As lottery fever winds to a close after the recent $1.5 billion Powerball drawing, several hard-working New York millionaires are questioning whether the new tax laws would put them in the same category as lottery winners who lucked into wealth.

While no NY lottery players got a share of the jackpot, local Buffalo news affiliate WIVB reported that two women each won $1 million around the time of the Jan. 13 drawing.

Amy McGavis of Dunkirk received her massive prize by matching five of the six Powerball numbers. Maryann Nowak of Cheektowaga also became wealthy overnight after she purchased a lottery scratch-off.

In every single U.S. lottery game, about 25% of the prize is withheld for federal tax. Then, depending on where a winner lives and their tax bracket, another 6% to 9% for state taxes.

Many millionaires in New York believe that the proposed tax reform would lump them in to a group with lottery winners, losing more than a fair share of their income that they worked hard to earn.

“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,” said Senate Majority Leader John Flanagan.

While lower income families do stand the benefit from the tax reform, the changes would be negligible. If the proposal is passed, married couples who file jointly and earn $40,000 to $150,000 would save about $50 per year.

State legislators maintain that the higher taxes on millionaires would generate substantial revenue for the state to reinvest in schools and infrastructure. However, it remains to be seen if lawmakers will garner enough support to pass the bill.