New Bill Would Raise Capital Gains Tax on Wealthy New Yorkers

New York Bill Details

The new additional tax would apply to “low-taxed investment income,” with that term defined to mean “the amount of an individual’s New York taxable income attributable to long-term capital gain, dividends or any other type of income taxed under the rates of Section 1(h) of the Internal Revenue Code.”

The bill text does not refer directly to annuities or to life insurance.

A new 7.5% additional tax on capital gains would phase in for a single taxpayer, or a resident estate or trust, with New York state taxable income over $400,000; a resident head of household with state taxable income over $500,000; and a resident couple with a state taxable income over $500,000.

The 7.5% tax would apply to “New York taxable income from long-term capital gain,” starting with the first $50,000 over the minimum income thresholds.

A higher 15% additional tax rate would begin to phase in for single taxpayers, estates and trusts with state taxable income over $800,000 and to joint filers and household heads with state taxable income over $1 million.

The 15% additional tax would be “phased in proportionally, beginning with a phase-in fraction of 50%, over the first $100,000 of New York taxable income” over the $800,000 threshold for single filers and over the $1 million threshold for other affected filers.

Legislative Mechanics

Rivera represents a district in the Bronx. He introduced S. 2162 with support from 19 co-sponsors.
The bill is under the jurisdiction of the New York Budget and Revenue Committee.
Rivera is not a member of that committee, but three of the 19 co-sponsors are budget committee members, and one co-sponsor, Sen. Andrew Gounardes, is the committee chair.
The committee has seven members.
Democrats control both the Assembly and the Senate in New York.
The governor, Kathy Hochul, is a Democrat. Hochul said Jan. 10, during a State of the State speech, that New York state will not increase income taxes this year.

Pictured: Albany, New York (Matt Wade/ALM)