New York Governor David Paterson and legislative Democrats have secretly agreed on an 8-billion-dollar two-year tax hike on individuals making more than 500,000 dollars a year that will "sunset" around the time he plans to run for election in 2010, The New York Post quoted legislative sources as saying on Monday.
Also under intense discussion Sunday as lawmakers rushed to complete a budget by April 1 is a proposal to raise the state's 4 percent sales tax to 4.5 percent the total of which would jump to close to 10 percent in parts of the state with the addition of local sales taxes.
The sales-tax hike, too, would sunset at the end of next year or in early 2011, legislative Democrats was cited as saying.
The current top tax rate is 6.85 percent for all incomes over 25,000 dollars a year. Sources could not say Sunday what the rate would rise to for incomes over 500,000 dollars, says the report.
Asked about his comment on the tax-hike plan, New York billionaire mayor Michael Bloomberg said cutting expenses is "the first place you should go."
New Yorkers earning 500,000 dollars or more pay for more than half of the city's taxes -- and Albany (capital of New York state)should focus on cutting spending before taking from the rich, Bloomberg was cited as saying.
The mayor also said that taxing the rich could hurt the city in the long run.
About "51 or 52 percent of our taxes come from people who earn 500,000 dollars a year or more," he was quoted as saying, adding that some 5,000 people in 2006 paid 30 percent of the city's taxes.
The mayor said that if 1,500 of those top earners decided to move to Connecticut (neighboring state), "that would cut 10 percent of our tax base. That's another 3.5 billion dollars," says the report.