Individual states are now taxing the rich to help balance the books.
January 16, 2012- The tax debate is in full scale in Washington. While Congress debates the matter on a national level, some states have turned to wealthy residents to bring in more state revenue. In two states, governors want the rich to help narrow the gap in their budgets.
This idea of taxing the wealthy in states is much different from last year when state leaders shied away from increasing taxes.
However, cuts in spending are not succeeding in narrowing the budget gap. States are seeing that simply cutting transportation, education and other departments cannot balance their budget.
Governor Cuomo of New York would not renew the state’s millionaire tax but increased taxes on the wealthy nonetheless. The hike in taxes will narrow the budget deficit gap for the state by almost 50% said state officials.
Cuomo made new tax brackets in the state that lower rates for those that earn under $300,000, but for those that earn more than $2 million the rate has been increased nearly 2% higher than originally expected.
Regarding the new tax hike, Governor Cuomo said, “No matter if someone earned $20,000 or $50 million, they were still paying the same base rates. It was not right because flat taxes on income are not fair taxes.”
In California, Governor Jerry Browne hopes voters approve a tax package and is planning to sell it to the residents of California during his Wednesday State of the State speech. If it were to pass there would be three new tax brackets created. Additional percentage points would be paid as income reached certain levels.
