Cuomo Has a Deal to Tax the Rich [Updated]

NEW YORK, NY - JUNE 26: New York Governor Andrew Cuomo marches during the 2011 NYC LGBT Pride March on the streets of Manhattan on June 26, 2011 in New York City. Thousands of revelers also had reason to celebrate since New York state legislators approved a bill legalizing same-sex marriage which Governor Cuomo signed in to law on Friday June 24. (Photo by Jemal Countess/Getty Images) Photo: Jemal Countess/2011 Getty Images

Governor Andrew Cuomo and leading  state legislators have reached a tentative agreement that will allow the New York millionaires’ tax to expire, but create new tax brackets and change some rates in an attempt to address the $3.5 billion budget gap, lessen the burden on middle-class residents,  and piss off Mayor Bloomberg. Under the new deal, New Yorkers making over $2 million would pay 8.82 percent state income tax, while anyone making under $300,000 would get a tax cut. Those making between $40,000 and $150,000 would pay a 6.45 percent tax, and anyone making between $150,000 and $300,000 would pay 6.65 percent. Previously, individuals earning more than $20,000 and couples earning more than $40,000 were taxed 6.85 percent (plus a surcharge, or the “millionaires’ tax,” for those making more than $200,000 a year individually or more than $300,000 on a joint return.) While extending the current “temporary” rates for top earners, which were adopted in 2009, would have raised about $4 billion for the state, the new plan is expected to bring in $1.9 billion. Related: Why Andrew Cuomo Should Proudly Tax the Rich [NYM]