#policy + #taxes

Mamdani has defended the tax as a fair way to generate $500m in annual revenue in a city with vast socioeconomic inequality. The surcharge - which several other cities and countries have in different forms - has won the support of Governor Kathy Hochul, who previously was hesitant to raise New Yorkers' taxes.

The mayor ran on a campaign platform of affordability, pledging to raise taxes to cover services like universal child care, and free and faster buses. His pledge to increase taxes has sparked backlash from some of the city's wealthiest residents who claim it will discourage people from buying homes and investing in the US's largest city.

Representatives for Mamdani's administration did not attend Tuesday's hearing, which angered some in attendance.

A spokesperson for Mamdani told the BBC the administration asked to push back the hearing while it dealt with the legal challenge, but the council declined and officials cannot testify on the matter while it's being litigated.

Jason Haber, who runs the American Real Estate Association, said the list of names and addresses threatens people's safety.

But Morris Pearl, a former managing director at investment firm BlackRock, said the idea that people were choosing not to invest in the city because of the tax was "absurd".

"The whole point of being rich is you can live wherever you want," said Pearl, a chair of Patriotic Millionaires, a group of wealthy Americans who advocate for taxing the rich.

"Someone who owns a residence that is not their primary residence that's worth more than $5m has the ability to pay more than most New Yorkers do."

Across the world, some countries and cities already experiment with similar secondary home taxes.

In France, homes are subject to an additional charge that varies across the country, with a 60% local tax surcharge for homes in Paris. The tax has generated billions of euros in revenue.

The city of Vancouver in Canada has an Empty Homes Tax on residences that are vacant or under-used for more than six months of a calendar year. The tax - 3% of the property's value - began in 2017 to help improve housing affordability.

Research from Canadian think tank C. D. Howe Institute found the tax has raised as much as $194m in revenue in eight years, and has reduced housing vacancies by as much as 21%, but has done little to bring down the average cost of rent.

In San Francisco, California, residents in 2022 voted for an Empty Homes Tax, which required owners to pay between $2,500 to $20,000 for apartments that are vacant for six months or more.

But like in New York, the tax faced fierce opposition from real estate and landlord groups in the technology hub, and after a group sued, a judge found the tax unconstitutional. It remains in limbo as the city appeals.

Pearl said the New York City administration's decision to launch the tax with a list of wealthy residents may not have been the most diplomatic choice.

"I do think that the mayor himself - I have suggested that he sort of unnecessarily antagonises people occasionally," Pearl said.

But, he added, "I'm with him on the policy."

Total effective tax rates (includes all taxes: federal+state income tax, sales tax, property tax, etc) for the richest Americans declined by 2018 to a level beneath that of the bottom 50% of earners,[18] contributing to wealth inequality. Analysis by economists Emmanuel Saez and Gabriel Zucman.

The Federal Insurance Contributions Act (FICA /ˈfaɪkə/) is a United States federal payroll (or employment) tax payable by both employees and employers to fund Social Security and Medicare[1]—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Since 1990, the employee's share of the Social Security portion of the FICA tax has been 6.2% of gross compensation up to a limit that adjusts with inflation.[a][9] The taxation limit in 2020 was $137,700 of gross compensation, resulting in a maximum Social Security tax for 2020 of $8,537.40.[7] This limit, known as the Social Security Wage Base, goes up each year based on average national wages and, in general, at a faster rate than the Consumer Price Index (CPI-U). The employee's share of the Medicare portion of the tax is 1.45% of wages, with no limit on the amount of wages subject to the Medicare portion of the tax.

So personal income tax in the US is ~30% for most of us (ranging from ~10%-37%), compared to Social Security's ~6.2% Medicare is 1.45% (or 12.4% + 2.9% if you count the employer portion). AND only the first ~$137K is taxable so our maximum tax amount to Social Security and Medicare is capped, while normal income tax that politicians can direct to anything from foreign wars to immigration enforcement to redistribution to different states or interest on debt driven by tax breaks to the rich that caused deficits.

His proposed budget would redirect $569 million from the state’s quarterly auctions of pollution permits away from the environmental spending those funds have been dedicated to since the auctions began in 2023. That half-billion-plus dollars would be used to shield state refunds of sales taxes for lower-income taxpayers from the budget axe.

To date, the auction funds — paid by major polluters for the right to keep damaging the global climate with emissions of heat-trapping gases like carbon dioxide — have gone mostly to expand clean energy use and to help 16 communities in Washington identified as being overburdened by air pollution.

The Climate Commitment Act, which created the state’s cap on carbon emissions and system of carbon auctions, specifies that the sales-tax refunds are an approved use of auction proceeds, though no auction proceeds have been used for tax rebates to date.

Rooftop solar has helped some tribal citizens lower their monthly energy bills from $160 to $10, as well as avoid blackouts.

Fossil-fuel combustion is the primary cause of the planet's rapidly heating climate.

The governor's proposed 9.9% tax on income over $1 million (revenues starting 2029) is the most contentious part of the plan.

In March 2024, the Washington State Legislature adopted Initiative 2111 to prohibit state and local personal income taxes. The measure passed with support from all Republicans and a majority of Democrats in both chambers. A 9.9% tax on personal earnings conflicts with this law. The administration hasn't explained how this complies with I-2111's prohibition.

This would be Washington's 12th income tax attempt since 1932—voters rejected it 11 times. By asking approval for a millionaire-only tax, the administration establishes a graduated framework that would only need legislative modification afterward, not further voter approval.

We strongly oppose an income tax but appreciate Gov. Ferguson's promise to let voters decide. He proposes a constitutional amendment limiting it to income over $1 million, yet his proposal ignores existing constitutional limits. If adopted, this income tax will certainly expand in the future.

The budget shifts $569 million in Climate Commitment Act (CCA) revenue to fund the Working Families Tax Credit. The CCA's original allocation was meant for carbon reduction and infrastructure projects but will now go toward direct cash assistance for lower-income households.