The mayor of New York wants to tax the city’s wealthiest people to help fix its ailing subways.
Mayor Bill de Blasio on Monday proposed raising the city income tax on people who earn more than $500,000 per year and couples who make more than $1 million. That would cover about 32,000 people, roughly 1% of city tax filers.
De Blasio said the increase could raise $700 million next year and more than $820 million per year by 2022. The highest marginal income tax rate would rise about half a percentage point to 4.41%.
“We’re not begrudging anyone’s success. But the success that many wealthy people have achieved has been because of government policies that favored them,” de Blasio, a Democrat, said at a press conference in Brooklyn. “People should pay their fair share.”
This has become known as the Summer of Hell in New York because of widespread repairs, delays and overcrowding on Amtrak, commuter rails and the New York subway, which is 113 years old and handles 6 million riders each weekday.
A city survey in June found that almost half of subway riders said service was slightly or far worse than last year. A subway derailment in June injured 39 people and brought the system to a halt.
New York City would not be the first to use a so-called millionaires tax. A handful of states, including California, adopted them after the Great Recession to close budget holes, according to the Tax Foundation, a policy research group.
About $500 million per year from de Blasio’s proposed tax increase would go toward signal improvements, new cars and track work. About $250 million would pay for half-priced transit cards for people who can’t afford the full cost, about $121 per month.
A state authority controls the subway, and the tax increase would have to pass the state legislature, where Republicans control the Senate. The majority leader’s office did not respond to a request for comment from CNNMoney, but a spokesman for Senate Republicans batted down the idea to The New York Times.
The chairman of the state authority, Joseph Lhota, has called for the city and state to split the bill for an $800 million rescue package. He said in a statement Monday that the subways need money “right now, not years from now.”
Governor Andrew Cuomo, a fellow Democrat who has feuded with the mayor, said the city should match the state’s money so Lhota’s plan can begin right away. “We cannot ask New Yorkers to wait one year to start repairs,” he said.
