New York this week agreed to hike taxes for its wealthiest residents and hike franchise taxes for corporations in an effort to boost public finances without further hampering the economy hit by the pandemic and lockdowns that the Have promoted remote work.
Business leaders say the increases – which would result in top earners in New York City being charged the highest combined tax rate in the U.S. – could backfire by driving off the very people and businesses that the city relies on for their earnings leaves.
The $ 212 billion state budget, passed by Democratic lawmakers and backed by unions and interest groups, provides more aid to schools, renters and small businesses. Billions are also poured into other progressive causes, including investments in renewable energy, money to support nonprofit arts and cultural centers, and payments to workers who are ineligible for state aid due to their immigrant status.
New York is slowly recovering. The state’s unemployment rate of 8.9% in February, the latest data, is the second highest among the 50 states and the District of Columbia.
Executives at the largest employers in New York City had spoken out against increasing taxes on appeals to state and local officials. They said higher tax rates were not needed to ensure economic recovery and would worsen problems by draining budgets when businesses and high earners left for good.