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ALBANY — After repeated promises during the first 11 months of his term that there would be no tax increases, Gov. Cuomo agreed yesterday to a new rate — the highest in the state — on New Yorkers earning more than $2 million a year.
His deal with legislative leaders also calls for modest cuts for most other taxpayers while raising revenue by almost $2 billion a year.
Cuomo campaigned for governor on a pledge to oppose new taxes for anyone — and said he would regard renewing the current 8.97 percent “millionaires’’ levy as just another tax hike.
Mere millionaires can rest easy under his new plan — but some 30,000 multimillionaires would pay taxes at a rate of 8.82 percent.
That is slightly less than what they pay now, but more than anyone else will have to cough up.
Had Cuomo and the lawmakers let the millionaires tax expire as scheduled in January, the top rate for all New Yorkers earning over $40,000 would have dropped to 6.85 percent.
Because the deal was reached before the current higher rates expired, Cuomo attempted to spin the plan as a tax cut for everyone — even multimillionaires.
“This would be the lowest tax rate for middle-class families in 58 years,” the governor said, referring to the 6.45 percent levied on families earning between $40,000 and $150,000.
Those earning $150,000 to $300,000 would pay 6.65 percent.
The plan would also reduce the much-hated MTA payroll tax levied in all the downstate counties served by the agency.
Cuomo’s formula calls for creating several new tax brackets to make the rates more progressive.
People earning $40,000 to $300,000 would pay less than they do now.
Most middle-class families would see an average savings of between $300 and $400 a year, the state projects.
For taxable income between $300,000 and $2 million, tax rates would also dip compared to the current charges.
But the future rates for that bracket would be exactly the same had no new deal been struck and the “millionaires tax,’’ which has been in place since 2009, were allowed to expire.
The wide-ranging deal, which would generate $1.9 billion for the cash-strapped state, includes some new spending on infrastructure and jobs for inner-city youth while reducing taxes on manufacturers and paving the way for potential revenue-producing casino gambling.
Cuomo, Assembly Speaker Sheldon Silver (D-Manhattan) and Senate Majority Leader Dean Skelos (R-Nassau) pushed the deal through now to avoid taking it up as part of next year’s budget negotiations — with the state facing a $3.5 billion deficit for the fiscal year beginning April 1.
Two “temporary” top rates adopted in 2009 are due to expire Dec. 31: a 7.85 percent rate for people with incomes above $200,000, and 8.97 percent for those making $500,000 or more. Extending those rates would have raised about $4 billion.
The extra revenue from the new tax rates would help Cuomo follow through on budgeted 4 percent spending increases in both education and health care in 2012-13.
Business groups praised the deal, which also creates a commission to take a long-term look at the tax code.
“Every New Yorker will be paying less New York state income tax in 2012 than they did last year,” said Steven Spinola, president of the Real Estate Board of New York and a principal of the Committee to Save New York, a business lobbying group.
“The emphasis on economic growth and jobs sends the right message to the business community.”
But Assembly Minority Leader Brian Kolb (R-Canandaigua), blasted the new tax rates.
“From what has been reported in the media so far, the bottom line is that taxes are being raised in New York state and we are still not dealing with our state’s serious spending problem.” Kolb said. “Tax hikes have never been the answer for creating more private-sector jobs and long-term prosperity for New Yorkers. That still holds true today.”
But Republican investment banker and Home Depot founder Kenneth Langone called Democrat Cuomo a “realist.”
Langone — who will pay the new top rate — said the plan addresses the state’s needs without creating an environment that drives New Yorkers out.
Of extending the “millionaires tax,” he said, “I never thought it had a realistic chance of going away.”