According to reports, the State of New York is facing a budget gap of over $6 billion in 2020. With the New York legislature disinclined to cut benefits, especially healthcare benefits, the deficit has led to talk of higher taxes.
Some of the ideas being floated would include a restructuring of the state’s income tax code that would include a hike on New York’s wealthiest residents. Likewise, there is talk about assessing property tax surcharges against homes that are valued at more than $5 million.
While most of the talk is about taxing wealthy individuals and large corporations, there is some concern among those watching the situation that tax hikes will also affect those of more modest means, including owners of small businesses. For instance, New York’s lawmakers have historically imposed taxes on vaping products, certain rental vehicles and energy sources like gasoline and electricity.
There are still many details to be worked out as to how the state plans to respond to the deficit. For instance, the governor has yet to unveil his budget proposal, and the current political climate in the New York Senate may make it more difficult to pass sweeping tax increases.
The upshot for everyday New Yorkers is that they will need to keep a close eye on changes to the state’s tax laws and regulations. Any change in the tax code, whether an increase or decrease, is going to mean that certain tax strategies which were once acceptable are going to be suspect, and vice-versa.
Moreover, given the shortfall in the budget, it is possible that the state will get more aggressive in its collection efforts.