Million Dollar Incomes Rise In Ny
They might not look like millionaires. They might not dress like millionaires. They might not smell like millionaires.
Yet there they are, the stealthy wealthy, walking among us, and more often than you might realize, according to a Gannett Albany Bureau review of state Department of Taxation and Finance records.
The number of people in New York who earn $1 million or more in taxable income annually jumped 8.5 percent between 2010 and 2011, the last year for which figures were available.
RocDocs database: Where weathy New Yorkers live, by county
Of the fast-growing millionaires club, 489 resided in Monroe County. Ontario County had 86 such earners; Genesee had 18, and Wayne had 12. Livingston and Orleans had none, but that may be because the state does not record any if there are fewer than five.
The statistics contain no names in deference to privacy.
George Conboy, whose Brighton Securities manages the wealth of many of the region's affluent residents, said the average person would be surprised to learn whose income is in excess of $1 million.
"So often you're standing in line next to them at the checkout in Wegmans or Target or filling up your car at the same gas station as them," Conboy said. "The average millionaire in Monroe County doesn't go around wearing a top hat and carrying an ivory-tipped cane."
"The reason you don't recognize millionaires among us is most of them are not Antonio Perezes, they're not corporate chieftains," Conboy added, referring to Eastman Kodak Co.'s CEO. "Most millionaires own a couple of dry cleaning shops or small businesses of one kind or another that provide them with a level of income that differentiate them but doesn't put them in the headlines."
To put $1 million in annual taxable income in perspective, consider that surpassing that level would require working 60 hours a week at a rate of about $333 per hour. Then keep in mind that New York just raised its minimum wage to $8 an hour.
Slower growth here
Statewide the number of earners making more than $1 million in taxable income in 2011 rose to 35,705, up from 32,917 in 2010 and on par with the 35,788 millionaires in 2008, the state records showed.
Erie County outstripped Monroe in the millionaire sweepstakes, with 608. Syracuse's Onondaga County had 287 millionaire earners, and Albany County numbered 250.
The rise in millionaire earners is good news for the state's coffers. But it has also fueled a debate in New York over whether the rich should be taxed more to fund programs and services.
"Income inequality is alive and well in New York," said Ron Deutsch, executive director of the labor-backed New Yorkers for Fiscal Fairness. "The wealthy are in fact continuing to get wealthier and they are seeing all the income gains in New York state right now, while the middle class and poor continue to lose ground."
E.J. McMahon, president of the Empire Center for Public Policy, a fiscally conservative group, said the increase in millionaires in New York is slightly less than the national average.
Earners of $1 million or more who live in New York, not those who earn their income in New York but live elsewhere, increased 6.8 percent between 2010 and 2011, according to IRS data. Nationally, it grew by 7.7 percent, McMahon said.
The increase in New York millionaires in 2011, the most recent figures available, wasn't as large as the increase in 2010, when it soared 19 percent from 2009.
"If there are more $1 million earners, there are more people paying taxes at one of the highest rates in the country," McMahon said. "If they are in New York City, they are paying the second highest rate in the country."
McMahon said that millionaires are paying an increasingly higher percentage of their salary in income tax.
State budget documents forecast that earners making $1 million or more are expected to pay 41 percent of the state's total income tax in 2014, a 17 percent increase from 2011. Yet they will represent 26 percent of the state's total earnings, an increase of 15 percent from 2011.
The total taxes paid in every other income bracket is expected to drop in 2014, the state budget showed.
"Their share of taxes is rising faster than their income," McMahon said.
In 2009, during the depth of the national recession, the number of millionaires in New York fell off 22 percent between 2008 and 2009. Those who earned more than $200,000 fell 8 percent.
The number of those earning more than $200,000 has also increased since then, up 8 percent between 2008 and 2011, the state records show.
New York City had 53 percent of the millionaires in 2011, a total of nearly 19,000 or 8 percent higher than in 2010. And 87 percent of them lived in Manhattan.
RocDocs database: Where weathy New Yorkers live, by county
The second most millionaire earners in 2011 lived in Westchester County, with 6,518 – an increase of 6.7 percent from the previous year.
Monroe County had a 16 percent increase in millionaires between 2010 and 2011, up from 422. Erie County had a 13 percent increase.
Gov. Andrew Cuomo has resisted raising taxes on the rich and instead has cut income-tax rates since taking office in 2011.
"Because we spent less, we could tax less and we did," Cuomo said in his State of the State address Jan. 8. "Every New Yorker pays less income taxes today than the day they did three years ago when we started this journey."
Lower tax rates
Millionaires have been taxed at a higher rate since 2009, and the higher rates were extended last year for three years as part of the state budget — bringing in more than $2 billion a year in revenue.
The highest tax bracket is a marginal rate of 8.82 percent for individuals who earn $1 million or more and married couples above $2 million. New York's top rate had been 8.97 percent prior to 2011.
Unions and liberal groups want what they say is a more "progressive" tax structure. In the early 1970s, New York had a personal income tax system with 14 brackets that went as high as 15.4 percent. Now New York has about five permanent brackets.
On Wednesday, advocacy groups formed the budget campaign, #NYInequality, to oppose what they deem are tax breaks for the wealthy in Cuomo's budget released Tuesday.
"This tax cut plan pads the already deep pockets of big bankers and super rich CEOs," said Karen Scharff, executive director of Citizens Action.
Cuomo proposed a $2 billion tax package that would freeze property taxes if local governments and schools limit spending and consolidate services. It would also include a reduction in the estate tax and lower corporate taxes.
Business groups hailed the proposals.
"Specific business tax reductions in the governor's tax package will have significant multiplier effects throughout the state's economy and will support more than 14,000 new jobs by 2019," estimated Heather Briccetti, CEO of the state Business Council.
Pressure from liberals
The greatest pressure on Cuomo to increase taxes on the rich is coming from New York City Mayor Bill de Blasio.
De Blasio wants to increase taxes on the city's wealthy to fund universal prekindergarten. As Cuomo seeks re-election this year, he said he wants to cut taxes, not increase them.
Cuomo proposed a $1.5 billion plan over five years to fund pre-K statewide without raising taxes.
"We have the funding, we want it to come online as soon, as fast, as you can bring it online," Cuomo said in his budget address Tuesday.
But de Blasio said the tax on the wealthy — those with a taxable income of more than $500,000 a year — would be a dedicated revenue stream to fund the program. He'll be in Albany on Monday to make his pitch to lawmakers.
"We're not asking the wealthy to help us out to punish success. We're doing it to create more success stories," de Blasio said Thursday in a speech in Washington, D.C. "And it is for our future that we take this action — to make sure that our future and the future of our children is secure."
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