BILL NUMBER: S8577
SPONSOR: LIU
 
TITLE OF BILL:
An act to amend the tax law, in relation to enacting the "fair share
act"
 
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to authorize New York City to impose an
additional local income tax of 2% on city residents earning over $1
million annually to ensure that the wealthiest New Yorkers pay their
fair share toward critical public services and infrastructure.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 names the act as the "Fair Share Act".
Section 2 amends the tax law by adding a new section 1304-e, authorizing
New York City to impose an additional 2% income tax on annual city taxa-
ble income exceeding $1 million and provides for administration,
collection, and distribution by the Commissioner in the same manner as
existing taxes.
Section 3 sets the effective date.
 
JUSTIFICATION:
This legislation enables local legislative bodies in cities such as New
York City to raise additional revenue by levying a modest additional 2%
surcharge on local filers who are making $1 million or more.
Today, New York City imposes essentially a flat income tax rate of
approximately 3.9%, meaning that a family earning $50,000 and an indi-
vidual earning $5 million pay nearly the same local income tax rate.
This fails to leverage the city's substantial economic growth to invest
in the public services that working New Yorkers rely on daily.
Similar taxes have been enacted in other states and cities yielding
substantial benefits. For example, Massachusetts implemented a similar
"Millionaire's Tax" in 2023, imposing a higher 4% surcharge on incomes
over $1 million, which raised $2.2 billion in its first year and direct-
ly funded crucial public infrastructure improvements. If enacted by
City Council, the tax authorized by the Fair Share Act would generate
approximately $4 billion in new revenue annually, enabling strategic
investments in healthcare, affordable housing, universal childcare,
transit improvements, safe streets, and other urgent needs.
At a time when federal tax policy continues to provide windfalls to
millionaires and billionaires while also substantially cutting essential
services such as Medicaid and SNAP, local action is necessary to protect
public services from disinvestment and budget cuts.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
If enacted by the New York City Council, the tax authorized by this bill
would raise approximately $4 billion annually in additional revenue for
New York City.
 
EFFECTIVE DATE:
Immediately.