New York City Mayor Bill de Blasio this week unveiled (PDF) his FY 2015 budget proposal, which includes an increase in the top income tax rate to fund universal pre-K. The top city taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. rate is currently 3.876 percent on income over $500,000; this would raise it to 4.41 percent for five years. The rate applies for singles, married joint filing, and head of households.
Current New York City Income Tax Rates, 2014
|
Single Brackets |
Married Brackets |
Head of Household Brackets |
Tax Rate |
|
>$0 |
>$0 |
>$0 |
2.907% |
|
>$12,000 |
>$21,600 |
>$14,400 |
3.534% |
|
>$25,000 |
>$45,000 |
>$30,000 |
3.591% |
|
>$50,000 |
>$90,000 |
>$60,000 |
3.648% |
|
>$500,000 |
>$500,000 |
>$500,000 |
3.876% |
Source: New York Department of Taxation.
Proposed New York City Income Tax Rates, 2014
|
Single Brackets |
Married Brackets |
Head of Household Brackets |
Tax Rate |
|
>$0 |
>$0 |
>$0 |
2.907% |
|
>$12,000 |
>$21,600 |
>$14,400 |
3.534% |
|
>$25,000 |
>$45,000 |
>$30,000 |
3.591% |
|
>$50,000 |
>$90,000 |
>$60,000 |
3.648% |
|
>$500,000 |
>$500,000 |
>$500,000 |
4.410% |
Source: New York Department of Taxation.
It is important to remember that these are on top of New York State income taxes. De Blasio’s proposal would result in a combined top income tax rate of 13.23 percent, just shy of California’s top rate of 13.3 percent.
Current Combined New York State & New York City Income Tax Rates, 2014
|
Single Brackets |
Married Brackets |
Head of Household Brackets |
State Tax Rate |
City Tax Rate |
Combined Tax Rate |
|
>$0 |
>$0 |
>$0 |
4.00% |
2.907% |
6.907% |
|
>$8,300 |
>$16,700 |
>$12,550 |
4.50% |
2.907% |
7.407% |
|
>$11,450 |
5.25% |
2.907% |
8.157% |
||
|
>$12,000 |
>$21,600 |
>$14,400 |
4.50% |
3.534% |
8.034% |
|
>$22,950 |
>$17,200 |
5.25% |
3.534% |
8.784% |
|
|
>$13,350 |
>$27,150 |
>$20,350 |
5.90% |
3.534% |
9.434% |
|
>$20,850 |
>$41,800 |
6.45% |
3.534% |
9.984% |
|
|
>$25,000 |
>$45,000 |
>$30,000 |
5.90% |
3.591% |
9.491% |
|
>$31,350 |
6.45% |
3.591% |
10.041% |
||
|
>$50,000 |
>$90,000 |
>$60,000 |
6.45% |
3.648% |
10.098% |
|
>$78,400 |
>$156,900 |
>$104,600 |
6.65% |
3.648% |
10.298% |
|
>$209,250 |
>$313,850 |
>$261,550 |
6.85% |
3.648% |
10.498% |
|
>$500,000 |
>$500,000 |
>$500,000 |
6.85% |
3.876% |
10.726% |
|
>$1,046,350 |
>$2,092,800 |
>$1,569,550 |
8.82% |
3.876% |
12.696% |
Source: Tax Foundation compilation.
Proposed Combined New York State & New York City Income Tax Rates, 2014
|
Single Brackets |
Married Brackets |
Head of Household Brackets |
State Tax Rate |
City Tax Rate |
Combined Tax Rate |
|
>$0 |
>$0 |
>$0 |
4.00% |
2.907% |
6.907% |
|
>$8,300 |
>$16,700 |
>$12,550 |
4.50% |
2.907% |
7.407% |
|
>$11,450 |
5.25% |
2.907% |
8.157% |
||
|
>$12,000 |
>$21,600 |
>$14,400 |
4.50% |
3.534% |
8.034% |
|
>$22,950 |
>$17,200 |
5.25% |
3.534% |
8.784% |
|
|
>$13,350 |
>$27,150 |
>$20,350 |
5.90% |
3.534% |
9.434% |
|
>$20,850 |
>$41,800 |
6.45% |
3.534% |
9.984% |
|
|
>$25,000 |
>$45,000 |
>$30,000 |
5.90% |
3.591% |
9.491% |
|
>$31,350 |
6.45% |
3.591% |
10.041% |
||
|
>$50,000 |
>$90,000 |
>$60,000 |
6.45% |
3.648% |
10.098% |
|
>$78,400 |
>$156,900 |
>$104,600 |
6.65% |
3.648% |
10.298% |
|
>$209,250 |
>$313,850 |
>$261,550 |
6.85% |
3.648% |
10.498% |
|
>$500,000 |
>$500,000 |
>$500,000 |
6.85% |
4.410% |
11.260% |
|
>$1,046,350 |
>$2,092,800 |
>$1,569,550 |
8.82% |
4.410% |
13.230% |
Source: Tax Foundation compilation.
De Blasio estimates the tax would raise $530 million per year, and notes that the top city income tax rate would still be lower than it was in the 1990s and mid-2000s. Nearly all the revenue — $505 million of the $530 million – would come from individuals and businesses with over $1 million in annual income.
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