The following is a NY Post exclusive report:
Assembly Speaker Sheldon Silver, desperate to find new revenues to avoid budget cuts, has secretly proposed a $1 billion tax hike on the highest income earners, The Post has learned.
Silver (D-Manhattan) outlined the proposal to Gov. Paterson late last week after buckling under pressure from newly announced Democratic gubernatorial contender Andrew Cuomo and others not to support a $2 billion borrowing scheme proposed by Lt. Gov. Richard Ravitch, insiders at the state Capitol said.
Silver’s plan would be another “millionaire’s tax” aimed at some 75,000 New Yorkers, mainly Manhattan and suburban earners making $1 million or more a year.
It’s designed to avoid spending cuts sought by Paterson and backed by Cuomo by hiking the state’s current 8.97 percent millionaire’s tax to 9.97 percent, an 11 percent increase. That would bring the total local tax levy for high-income city residents to 13.618 percent, before federal taxes.
Hardest hit are the same wealthy earners that Paterson, Mayor Bloomberg, Cuomo and others have warned are preparing to pack their bags and leave the state under the pressure of New York’s sky-high tax levy.
The most recent records show that in 2007 about 85,000 in-state and out-of-state taxpayers earned over $1 million in New York, but that number is believed to have dropped sharply in the wake of the 2008 Wall Street meltdown and the on-going national recession.
The highest 1 percent of income earners account for about 36 percent of all state taxes.
Paterson wryly hinted at Silver’s tax plan when he was pressed to explain how the speaker planned to make up for the revenues that would have otherwise been raised through borrowing.
“Did he tell you what the plan that took all the borrowing out had replaced it with?” said Paterson when pressed by reporters.
“It starts with a T,” he continued.
Asked if the word was “taxes,” Paterson responded, “It wasn’t ‘tolerance.’ ”
Silver refused to disclose his proposal, although a spokesman conceded it involved “potential revenue raisers.”
Silver led the way last year in imposing a massive “millionaire’s tax,” which actually hit earners with incomes starting at $200,000 a year.
It was supposed to raise nearly $4 billion annually, but revenues came in far lower because of the brutal national recession and the replacement of many taxable Wall Street bonuses with stock options, which are only taxed when exercised.
Assembly Speaker Sheldon Silver has concocted a new tax-the-rich plan:
Hits those making $1 million or more
About 75,000 people affected
Would raise an additional $1 billion
Raises income tax rate to 9.97% from 8.97%
(Source: NY Post)