In his final State of the City address Thursday, de Blasio, a Democrat, called for the redistribution of wealth and a billionaires tax as part of a broader Recovery for All agenda meant to help the city recover from the economic downturn caused by the pandemic.
With the power to increase city income taxes lying with state leaders, de Blasio said in the prerecorded video that the city would join a coalition of groups that are advocating in Albany for more taxes on the wealthy.
"We're going to work constantly for a fair economy, and that means we must tax the wealthy, and we must redistribute the wealth of the city to those who do the work," de Blasio said.
De Blasio also called for a rental assistance tax credit to help sectors in the city hurt by the pandemic, including food service, entertainment and the arts. Small businesses with gross revenue of less than $1 million would be eligible for a tax credit equal to 6% of their 2021 calendar-year rent, de Blasio's office said, with a maximum total credit of up to $10,000. The $50 million program would help about 17,000 small businesses, the office said. The measure would also need Albany approval.
"We're going to help revitalize small businesses directly," de Blasio said. "We're going to set up a small-business recovery tax credit to keep their doors open, and, with stimulus funds, provide struggling small businesses loans to get them back on their feet."
The mayor also called on Washington, D.C., leaders to enact a stimulus package that would allow the city to recover from the pandemic, noting that the tax credit could be expanded if there's more federal aid for cities. That expansion would include allowing more types of businesses to be eligible for the credit and an increase in how much businesses could claim, his administration said.
De Blasio's plan was met with skepticism from business interests. Kathryn Wylde, president and CEO of the Partnership for New York City, which is made up of city business leaders, told Law360 the speech failed to acknowledge that the city thrives when government and business work together.
"His call for increasing taxes on the wealthy sends the wrong message at a moment when he should be trying to retain or attract back the entrepreneurs, investors and philanthropists who are so necessary to restore the 500,000 jobs we have lost during the COVID," Wylde said.
Wylde also called the proposed tax credit program a drop in the bucket compared to the needs of small businesses, noting that there are 240,000 small businesses in the city.
Earlier this month, de Blasio proposed a $92.3 billion budget that calls on the state to increase taxes on the wealthy and for more federal aid. But his proposal doesn't hike property taxes to bridge a $5.25 billion budget gap. De Blasio's office has said city property tax revenue alone has declined by $2.5 billion in the 2022 fiscal year because of reductions in assessed property value, noting it was the largest decline in property tax value since 1996.
Pressure to increase taxes on the wealthy and business in New York has grown as the state and New York City have seen steep economic losses because of restrictions to reduce the spread of the novel coronavirus.
More than 100 progressive New York groups that have launched a campaign to pressure state leaders this year to increase and expand taxes on capital gains, estates, billionaires, Wall Street and corporations. The coalition, calling itself the Invest In Our New York Campaign, has backed a package of six bills it says would raise billions of dollars. It's pushing state lawmakers and Democratic Gov. Andrew Cuomo to pass the package during this legislative session.
Cuomo, a Democrat, has proposed a budget that would increase the state's top income tax rate to create a combined rate that's the highest in the country, unless the federal government provides billions of dollars in aid. The proposal would increase the state's top income tax rate on individuals from 8.82% to 10.82% with the anticipation of receiving roughly $6 billion in federal aid. The 10.82% tax rate, combined with New York City's top rate, would make the combined 14.696% the highest income tax rate in the country, Cuomo has said.
State legislative leaders for Republicans and Democrats didn't immediately respond to requests for comment on Friday, though Democratic leaders have shown some support for tax hikes.
City Council leaders didn't immediately respond to requests for comment on Friday,
Cuomo's office didn't immediately respond to requests for comment on Friday, but his state budget director last week shot down proposals by progressive groups and others for more expansive tax measures as unfeasible.
--Editing by Vincent Sherry.
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