Albany, NY — Freshman Assemblymember Sarahana Shrestha has co-introduced a bill that aims to raise $9 billion from tax on corporate profits. Shrestha carries the bill (A3690/S01980) in the Assembly with lead sponsor Anna Kelles of Ithaca. In the Senate, it is carried by Senator Brad Holyman-Sigal of Manhattan.
In 2021, New York temporarily raised the corporate income tax rate from 6.5% to 7.25% for companies with more than $5 million in business income base. This minor adjustment raised hundreds of millions in revenue each year, but the law expires in 2023.
Last week, when Governor Kathy Hochul released her executive budget, she acknowledged that she included a proposal to extend the tax bracket for three more years to appease the left. But the newly introduced Corporate Tax bill does more than just extend the law, it proposes progressive tax rates that start at more than $2.5 million in profits, and it closes loopholes that businesses use to avoid paying taxes.
“Corporations have no problem jacking up prices and asking consumers to ‘pay for inflation’,” said Shrestha, “Private utilities like Central Hudson have no problem raising rates even as its parent company, Fortis, boasts of record profits. Exxonmobil, Johnson & Johnson, and Amazon continue to line their pockets on the back of working families who are struggling to make ends meet. We need to tax corporations so that we can claim what is rightly ours. It is money owed to us.”
The new tax rates being proposed are as follows:
- 8% on corporations with business income base of over $2.5 million
- 12% on corporations with business income base of over $10 million
- 14% on corporations with business income base of over $20 million
“Even with the temporarily increased tax rate of 7.25%,” said Shrestha, “New York is still behind ten other states, including Vermont, Pennsylvania, New Jersey, and Delaware, who tax at higher rates. For example, New Jersey’s tax rate for the top bracket, which starts at $1 million, is 11.5%. We are always being asked how we plan to pay for the things we need, and this is how. By raising revenues from those who are hoarding money and have outsized influence on our democracy.”
The proposed structure would affect a small number of large corporations that earn significant amounts of profits from New Yorkers. The taxable income is not dependent on where the company is registered, but rather on factors such as where the earnings are made. According to multiple polls, around 76% of New Yorkers support taxing corporations.
“President Trump introduced tax cuts that lowered the federal corporate tax rate by 14 percentage points, while our proposal would raise state taxes on the most profitable corporations by only around 7 points—the same amount as President Biden initially proposed as part of his Build Back Better agenda,” said Shrestha, “Foreign investors now own 40% of the equity in American companies, including many companies based in New York, and we need to make sure we’re putting everyday New Yorkers first.”
The Corporate Tax bill is one of the five revenue-generating bills that is being backed by the “Invest in Our New York” coalition, which includes member organizations from across the state, including Democratic Socialists of America, Working Families Party, Community Voices Heard, Housing Justice for All, and Citizen Action. The campaign comes with spending bills attached to ensure the revenues are spent on programs that are most effective at improving the lives of New Yorkers, such as housing security, clean energy and lower utility bills, universal childcare, free SUNY and CUNY, and fixing the MTA. AM Shrestha will be a cosponsor on all the revenue bills as well as the spending bills.
In response to the Governor’s executive budget, a press release sent by the coalition said, "If Governor Hochul really believes she can ‘meet the moment’ and make real progress for New Yorkers, then she will join the dozens of legislators and a majority of New Yorkers who support making the ultra-rich pay what they truly owe in taxes and investing those newfound billions directly into the public programs that help the many, not the few.”
“Those in power are quick to blame high demands from low-and-moderate income New Yorkers as the cause for inflation,” said Shrestha, “But this inflation was largely caused by corporate price gouging and dependence on volatile prices of fossil fuels that power everything from transit to the factories making the goods we depend on. We have to take a holistic approach in ensuring New Yorkers have a dignified life, and taxing those at the top is a critical part of it.”
Governor Hochul’s proposal as-is would raise $810 million compared to the bill’s target of $9 billion.