BILL NUMBER: S165
SPONSOR: RAMOS
 
TITLE OF BILL:
An act to establish the "billionaire mark-to-market tax act"; and to
amend the tax law, in relation to establishing a mark-to-market tax
 
PURPOSE:
Establishes a billionaire mark-to-market tax taxing residents with one
billion dollars or more in net assets.
 
SUMMARY OF PROVISIONS:
Section 1. Establishes the act to be cited as the "billionaire mark to
market tax act".
Section 2. Amends the tax law by adding a new section 612-a, which
treats residential billionaires capital gains on their net assets as
annual income, furtheimore, taxing billionaires yearly unrealized capi-
tal gains. Year one taxes all built in gains on assets owned by billio-
naires before 2020 with an option to pay in ten installments. Year two
onward, taxes the yearly gains of assets unrealized.
Section 3. Sets the effective date.
 
JUSTIFICATION:
In the wake of the COVID-19 pandemic, the economy is in free fall and
the New York State budget is facing massive deficits. State budget
projections show a $15 billion annual budget deficit. At the same time,
wealth inequality is exploding across New York. While regular New York-
ers struggle to make ends meet, New York's 120 billionaires are $77
billion richer than they were at the beginning of the pandemic. The
Billionaire Mark-to-Market Tax tax would give the state a mechanism to
raise revenue in a progressive manner while addressing growing wealth
inequality.
Today, people pay taxes on stocks and other assets only when they sell
them. They do not pay annual taxes on the increased value of these
assets and often never sell them and pass them on to their spouses at
death on a stepped up basis. Moreover, the Mark-to-Market Tax would tax
the increase in value of billionaires assets at the same rate as other
income 8.82%.
While New York State's constitution does not permit an "ad valorem tax
on intangible property", a Mark-to-market tax is not an ad valorem.tax.
An ad valorem tax would tax a billionaire who started and ended 2021
with 1 billion dollars in wealth, a mark to market does not tax this
billionaire or his wealth because there were no gains. In comparison, if
a billionaire starts the year at $1 billion in worth, but ends the year
at $2 billion in net assets, then this tax would treat the $1 billion
gain like income.
This tax is necessary to address the growing wealth inequality crisis
and to raise the necessary funds to fill budget gaps and to fully fund
the programs New York State needs to survive
 
LEGISLATIVE HISTORY:
2023-24: S1570 (Ramos) - Referred to Budget and Revenue / A3252 (Kelles)
Referred to Ways and Means
2021-22: S4482 (Ramos) - Referred to Budget and Revenue
 
FISCAL IMPACT:
Year 1 Revenue: $23.3 Billion. The legislation provides an option to pay
year 1 of the tax in 10 annual installments.
Year 2- onward Revenue: $1.2 Billion or more
 
EFFECTIVE DATE:
This act shall take effect immediately.