The New York State Legislature, following the lead of Governor Andrew Coumo, may have toppled the domino in the trend to tax higher income earners at higher rates. The two agreed to a measure to increase state income tax rates to 8.82% on those reporting more than $2 million of annual income. Read the New York Times coverage here.
High net worth individuals have been under increased scrutiny by the IRS since the rebranding and reorganization of the Large & Mid Sized Business examination division over a year ago into Large Business & International. Notably the new LB&I organization increased the IRS’s emphasis on the activities of high net worth taxpayers here and abroad. (See the “Wealth Squad” IDR we shared here a few months ago).
Now the talk of increasing rates on America’s highest earners that started with Warren Buffett and William Gates, Sr has found another advocate in the governor and lawmakers of the great state of New York. Whether this is an effect of the Occupy Wall Street movement, a budget necessity or a true compromise as suggested by members of both political parties in the New York General Assembly, the result is higher taxes for the wealthiest New Yorkers and most likely and increased scrutiny of how much they pay.