The millionaire tax in New York City refers to the higher income tax rates that apply to individuals earning over $1 million annually. This tax is part of New York State’s progressive income tax system, which imposes higher rates on high-income earners. In addition to the state income tax, New York City imposes its own local taxes, making the combined tax burden on high earners particularly significant in the city.
New York State’s Millionaire Tax
New York State has multiple tax brackets for high earners, with the highest rates applying to those earning over $1 million. As of 2024, the key state tax brackets for high-income earners are:
- 6.85% for income between $215,400 and $1,077,550
- 9.65% for income between $1,077,551 and $5 million
- 10.3% for income over $5 million
For a single filer earning $1 million, the state tax could be approximately $60,000 or more, depending on other deductions and credits.
New York City’s Local Income Tax
On top of state taxes, New York City residents are subject to local income taxes. The NYC income tax rates for high earners range from 3.078% to 3.876%, which further increases the tax burden. For example, a resident earning $1 million could pay around $20,000 or more in NYC local taxes, in addition to state taxes.
Total Tax Burden for Millionaires in NYC
The combination of federal, state, and local taxes can push the effective tax rate for individuals earning over $1 million well above 40%. A $1 million income in NYC could result in a tax bill of $150,000 or more, depending on various factors such as deductions and filing status.
Why is the Millionaire Tax Controversial?
Supporters of the millionaire tax argue it helps fund essential public services like education and healthcare. However, critics claim that high taxes may drive wealthy individuals out of the city or state, potentially damaging New York’s economy.
New York City’s Local Income Tax
On top of state taxes, New York City residents are subject to local income taxes. The NYC income tax rates for high earners range from 3.078% to 3.876%, which further increases the tax burden. For example, a resident earning $1 million could pay around $20,000 or more in NYC local taxes, in addition to state taxes.
Total Tax Burden for Millionaires in NYC
The combination of federal, state, and local taxes can push the effective tax rate for individuals earning over $1 million well above 40%. A $1 million income in NYC could result in a tax bill of $150,000 or more, depending on various factors such as deductions and filing status.
Why is the Millionaire Tax Controversial?
Supporters of the millionaire tax argue it helps fund essential public services like education and healthcare. However, critics claim that high taxes may drive wealthy individuals out of the city or state, potentially damaging New York’s economy.
