ALBANY, N.Y. (AP) — New York residents stand to face $43 billion in tax increases if Washington can’t find a way to avoid the fiscal cliff at the end of the year, state Comptroller Thomas DiNapoli says in a report he was scheduled to present Thursday.
DiNapoli said the many cost-cutting and tax-increasing measures that would automatically kick in without a budget deal between Congress and President Barack Obama’s administration will result in thousands of dollars lost to each family in the state.
“There is real danger for New York’s economy if America goes over the fiscal cliff,” DiNapoli said in a statement. “Many New Yorkers are still recovering from the Great Recession and struggling each day to make ends meet — and some are literally digging out from (Superstorm) Sandy’s devastation. The fiscal cliff’s massive one-two economic punch could easily push the state’s economy backward.”
The late October superstorm killed more than 100 people in 10 states but hit New York and New Jersey the hardest.
The calculations by the state comptroller’s office and his analysis were scheduled to be released Thursday at a Business and Labor Coalition of New York event in Manhattan on the impact the fiscal cliff, a combination of expiring tax cuts and across-the-board spending cuts due to take effect in January, would have on Wall Street and New York.
DiNapoli found failure to agree on a fiscal plan in Washington will:
— Sharply increase federal taxes on Jan. 1 for all working New Yorkers.
— Increase the payroll tax rate by 47 percent for employers and “immediately reduce paychecks.”
— Cost an average family with two children $1,000 a year from reductions in the federal child care credit on income tax returns.
— Cost a New Yorker making $34,000 or less per year with two children an additional $1,000 in federal tax credits because of automatic changes to the Earned Income Tax Credit.
— Cost local and state governments $5 billion in federal funding over nine years, forcing higher state and local taxes or reduced services and spending.
— Hit higher-income New Yorkers hard. An additional 3.4 million New Yorkers would be required to pay the alternative minimum tax, which the Internal Revenue Service says attempts to ensure that someone “who benefits from certain exclusions, deductions, or credits pays at least a minimum amount of tax.” For them, a $5,180 average hit would be felt April 15. About 500,000 pay the AMT now.
Copyright 2012 The Associated Press.