NYC’s Wealthiest Will Pay Highest Combined State and Local Income Tax Rates in U.S.

New York City’s wealthiest earners will likely pay the highest combined state and local income tax rates in the U.S., according to a budget deal among New York lawmakers that would raise taxes among this bracket.

The Wall Street Journal reported Sunday that the move by state lawmakers would raise income and corporate taxes by $4.3 billion each year.

State lawmakers plan to raise the state income tax to 9.65 percent from 8.82 percent for individuals who make more than $1 million each year and joint filers who make more than $2 million.

This does not include New York City’s top income tax rate of 3.88 percent, which means that individuals in New York City making more than $1 million would pay at least 13.53 percent in state and local taxes combined.

The proposed tax rate would surpass California’s top income tax rate of 13.3 percent for individual filers making more than $1 million, which had been the top income tax rate in the U.S. since 2012.

The plan would also create two additional tax brackets for individuals making more than $5 million each year, taxing income at a rate of 10.3 percent until the income threshold hits $25 million when the rate jumps to 10.9 percent.

This means that the highest income tax bracket in New York City would be taxed at a rate of 14.7 percent, more than double the top rate in most states except ten states in the U.S.

The additional tax revenue would be used to provide funds for illegal immigrants, increase school spending, and give money to small businesses and tenants who are behind on their rent, the Journal reported.