New York State Considers Wealth Tax Increase... Raises Top Income Tax Rate to 14.8%

Corporate Tax Rate Raised from 6.5% to 7.25% for High Earners with Annual Income Over $1 Million (Approx. 1.1 Billion KRW)

▲Andrew Cuomo, Governor of New York State [Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] As the U.S. Biden administration is pushing to raise the corporate tax rate for economic recovery, New York State has become the first among state governments to unveil a 'wealth tax' card. Discussions on tax increases to cover the worsened finances following the COVID-19 pandemic appear to be heating up.

On the 5th (local time), according to Bloomberg and The New York Times (NYT), the New York State Legislature tentatively agreed on a tax increase plan to collect $4.3 billion (approximately 4.8319 trillion KRW) annually from high-income earners and corporations to secure insufficient tax revenue. Both the State Senate and Assembly in New York are dominated by Democrats holding more than two-thirds of the seats, so this tax increase plan is expected to pass without much difficulty. It is scheduled to be announced as early as Monday the 12th.

If approved, individuals earning an annual income of $1 million (approximately 1.1 billion KRW) or couples with a combined annual income of $2 million or more will see their income tax rate temporarily increase from the current 8.82% to 9.65%.

Additionally, new tax brackets will be established for ultra-high-income earners with annual incomes between $5 million and $25 million, and those earning over $25 million, imposing income tax rates of 10.3% and 10.9%, respectively, until 2027.

Furthermore, residents of New York City are separately subject to a top income tax rate of 3.88%, which combined means paying approximately 13.5% to 14.8% of total income to New York State. This exceeds California’s top tax rate of 13.3%, which is known as the highest in the U.S.

High-income earners with annual incomes over $400,000 must also pay up to 37% income tax to the federal government, separate from New York State taxes. New York State is also reportedly planning to raise the corporate tax rate from the current 6.5% to 7.25%.

Following New York State, other states may also propose additional tax increases. The California State Legislature has begun discussions on introducing a wealth tax on high-income earners, and in Minnesota, the governor recently proposed establishing new tax brackets with higher top rates. The Washington State Senate passed a tax bill last month imposing a 7% tax on capital gains over $250,000.

This content was produced with the assistance of AI translation services.