New York Governor Andrew Cuomo speaks to the media at a press conference in Manhattan on May 5, 2021 in New York City.
Spencer Platt | AFP | Getty Images
New York Governor Andrew Cuomo is privately encouraging some of the state’s richest business leaders to stay in the Empire State and is campaigning for lawmakers to lift the federal limit on state and local tax deductions known as SALT.
Cuomo took the opportunity to discuss the matter with a small group of executives who, during a call on Thursday, included Wall Street financiers, such a person with direct knowledge of the matter.
This person declined to be named in order to speak freely about what was considered a private conversation.
“As business leaders, we should tell people to stay in New York and try to add SALT to the new tax bill,” said the person, knowing the call, when describing Cuomo’s message to attendees.
The Biden government wants to withdraw parts of former President Donald Trump’s 2017 tax reform law in order to finance the infrastructure. Some Democrats, including Cuomo, are calling on the White House to remove the $ 10,000 ceiling Trump has imposed on SALT deductions as part of changes.
A Cuomo press representative did not return repeated requests for comments.
In the state budget recently signed by Cuomo, New York’s richest executives would likely see higher combined local and state income tax rates than those for wealthy California residents.
Within the more than $ 200 billion state budget, the top tax rate will be raised from 8.82% for single applicants earning more than $ 1 million to 9.65%. Those earning between $ 5 million and $ 25 million would be taxed around 10.3%, and those making more than $ 25 million would be taxed at 10.9%. Wealthy earners are expected to experience these new taxes in the next tax season. The tax rates will expire in 2027.
Wealthy New Yorkers previously signaled to CNBC that they could leave New York altogether and travel to Florida with taxes on the verge of hitting the historic levels of the wealthy in the Big Apple.
Cuomo’s commitment to these executives comes from being besieged for alleged sexual harassment and his government’s handling of nursing home death dates during the Covid pandemic. Cuomo has denied the sexual harassment allegations.
Cuomo has also previously said that he is looking to run for a historic fourth term in 2022 and that it could help build support for another run if large corporations, along with their leaders, are deterred from leaving New York. A recent poll by the Siena College Research Institute found that 33% of those polled would vote for Cuomo to run for re-election next year, compared to 57% who would prefer “someone else”.
Cuomo previously requested that the SALT cap be removed.
“The repeal of SALT would lower the effective tax rate for the state’s top earners by 37%,” Cuomo said in April. “The state’s new tax rate of 10.9% becomes an effective tax rate of 6.9%,” he said. Cuomo was part of a group of governors who sent a letter to President Joe Biden calling for the SALT cap to be lifted.
Taxpayers, particularly wealthy people in New York and other high-tax countries, including New Jersey and California, saw the greatest benefits when there was no cap on SALT deductions, including state and local property and income taxes.
New York executives, including the New York City Partnership Head, have urged Senate Majority Leader Chuck Schumer, DN.Y., and Biden’s team to bring the full trigger back.
Representative Tom Suozzi, DN.Y. and Josh Gottheimer, DN.J., are among those Democratic lawmakers who say they will oppose changes to tax law unless SALT is brought back.
White House press secretary Jen Psaki said in April that the SALT withdrawal was “not a revenue boost” and it was unclear whether the Biden government plans to lift the cap as part of its infrastructure plan.
Biden plans to raise taxes to pay for his $ 2 trillion infrastructure proposal. Biden has stated that he is open to raising the corporate tax rate to 25% to 28% to pay for his infrastructure plan and has vowed not to levy taxes on those earning less than $ 400,000.