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Mayor de Blasio Wants to Raise Taxes on New Yorkers Making Over $500K to Pay for Subway Repairs

Bill de Blasio is asking the one-percenters to save the subways. The mayor has proposed a tax on the wealthiest New Yorkers to help pay for public-transit repairs, and to subsidize the costs of reduced-fare MetroCards for low-income New Yorkers.

It’s “time for fairness when it comes to supporting the MTA,” de Blasio said Monday in Brooklyn Borough Hall. “That is why I’m calling on Albany to pass a millionaires’ tax to support the MTA. We need a millionaires’ tax so that New Yorkers who travel in first class pay their fare share so the rest of us can get around.”

Individuals making more than $500,000 per year and couples making more than $1 million would be subject to the possible tax — a half-point boost in the city’s top income-tax rate, from 3.9 percent to 4.4 percent, reports the New York Times. (Someone making $1 million would pay about $2,700 annually, or about seven dollars per day, de Blasio said.) “It’s about time they pay a little more so the rest of us can actually lead a better life,” the mayor said, referring to the richest New Yorkers.

About 32,000 New York City residents, just a tick less than one percent, would be subject to this new tax, which would raise an estimated $700-to-$800 million each year. About two-thirds — approximately half a billion dollars — would go exclusively toward MTA capital costs, which cover system and infrastructure upgrades to subways and buses. The rest would cover the subsidies for half-price MetroCards for the poorest (about 800,000) New Yorkers — a program transit advocates have increasingly pressured City Hall to support as the monthly fares get pricier and pricier.

De Blasio’s proposal comes as Albany and City Hall battle over who should help pay for the cost of the crumbling subway system. MTA Chair Joe Lhota announced an $800 million MTA rescue plan last month, and called on the city and state to each chip in about half. De Blasio, however, opposed it, saying New Yorkers already shoulder a huge chunk of the MTA’s financial burden, and that the transit authority isn’t spending the money it has appropriately, or has diverted funds away from the MTA to the state budget.

Any sort of “millionaires’ tax” will need an approval from Albany, so even if it can get through the state legislature, it won’t be a quick fix to the city’s daily subway woes. Lhota made that point in responding to de Blasio’s proposal: “The bad news is that the mayor has not acknowledged that the MTA needs funding today. You can’t delay an emergency plan to stop delays.”

Governor Cuomo backed Lhota up in his own statement. “The city should partner with us and match the state funding now so we can begin Chairman Lhota’s overhaul plan immediately and move forward,” he said. “We cannot ask New Yorkers to wait one year to start repairs.” According to the New York Times, Cuomo may also be exploring some version of a congestion-pricing plan to introduce next year. Congestion pricing, which would charge a fee to drivers who enter Manhattan during peak times, was championed by Mayor Michael Bloomberg almost a decade ago, but it died swiftly in Albany.

For his part, de Blasio described the debate between congestion pricing and his millionaires’ tax as one of “apples and oranges,” calling his plan a “matter of fairness.”

Either way, the MTA will likely have to start considering new revenue streams – apart from hiking fares, or racking up more debt – to fund the system long-term, a topic discussed at length at last month’s board meeting. But, so far, transit advocates seem split as to whether taxing-the-one-percent is the way to go. John Raskin, the head of the Riders Alliance, said in a statement that “it’s fair to ask the New Yorkers who benefit the most from our city’s prosperity to pay a little more to repair the infrastructure that the entire economy relies on.”

But Citizens Budget Commission president Carol Kellerman called the millionaire’s tax ”not an appropriate way to raise revenue for the MTA.” “Taxpayers, particularly New York City taxpayers, already provide approximately 40 percent of the mass transit budget through the payroll mobility tax and other taxes,” she said in a statement, adding the city could subsidize half-price Metro cards through “existing resources.”

Mayor de Blasio Wants to Tax High Earners to Pay for Subways