In a press release issued last week, New York State Assemblyman Fred W. Thiele, Jr. said that he supports the extension of the “so-called” Millionaire Tax, one of the most hotly debated issues in the 2012 state budget discussion.
The proposal would extend for another year the existing tax rate on those earning more than a $1,000,000 a year at 8.97 percent. The rate on millionaires would be reduced to 6.85 percent on December 31, if no action is taken in Albany.
The surcharge generates upwards of $4 billion a year.
“Proponents state that the additional funding is necessary to maintain state spending and programs,” said Thiele. “Opponents say the additional tax will injure the states economic recovery. In 2009, I voted against this tax surcharge because the surcharge was imposed not on millionaires but those with incomes of $250,000 or more, and the revenue was used to fuel one of the biggest spending increases in New York State history. We could ill-afford such a tax and spending policy in the middle of a recession.”
Thiele said that under Governor Andrew Cuomo, the state has begun to address its fiscal woes, and has eliminated a $10 billion budget deficit with no new taxes or borrowing. Medicaid costs were also reined in, said Thiele, and the state adopted a two-percent real property tax levy cap.
That being said, Thiele noted that if the “millionaire tax” rate is reduced to 6.85-percent, those residents making over $1 million a year will be paying the same tax rate as a family of four making $40,000.
“Although I represent the Hamptons, not one millionaire has contacted me to complain about the 8.97 percent rate or has said they are leaving the state,” said Thiele. “At the same time, my office continues to be inundated by middle class residents who are being overwhelmed by real property taxes. Many have left the state. The two percent property tax cap was a good first step, but only a first step. New Yorkers need property tax reduction, not just a cap.”
This is exactly why Thiele has sponsored a new bill extending the 8.97-percent property tax rate on millionaires. It would also create a real property tax “circuit breaker,” said Thiele, for middle class homeowners earning $250,000 or less.
The legislation would cap property taxes based upon a percentage of income reflecting the ability to pay. Excess property taxes would be refunded through an income tax credit. This would reduce property tax payments by the middle class by $2.3 billion dollars. The remaining revenue would be placed in a separate account for state aid to education, further reducing school taxes and maintaining education quality.
“It is fair and equitable and is the path to real economic recovery for Long Island and all of New York,” said Thiele.