CHAIR

THE ASSEMBLY Ethics and Guidance

STATE OF NEW YORK CHAIR
ALBANY Codes Subcommittee on
Criminal Procedure

COMMITTEES
Codes
Education
DANIEL O’DONNELL
Environmental Conservation
Member of Assembly
th Judiciary
69 Assembly District
Oversight, Analysis & Investigation
Tourism, Parks, Arts & Sports Development

May 25, 2010

Dear Colleague,
I write to you regarding legislation that recently passed both houses of the New Jersey State Legislature.
The bill, number A10, would increase the gross income tax rate on income exceeding $1 million from
8.97% to 10.75%.
If you were not previously aware of this legislation, I’ve attached its text. The bill would provide
hundreds of millions of dollars in revenue for New Jersey while affecting only 16,000 of that state’s
residents.
This action taken by New Jersey legislators demonstrates the willingness and leadership of other
legislatures to take a principled stand in this current economic crisis. Indeed, both houses passed the bill
by sizable margins, despite New Jersey having the highest property taxes in the nation.
Opponents may argue that if we raise the marginal tax rate on income over $1 million here in New York,
our wealthiest residents will “flee” to neighboring states like New Jersey. Yet, the fact that New Jersey
legislators were willing to increase their highest tax bracket to 10.75%, almost two percent higher than
the current marginal tax rate in New York, makes this argument unrealistic.
Additionally, research plainly demonstrates that such fears are unfounded. A recent study titled Raising
State Income Taxes on High-Income Taxpayers by the Center on Budget and Policy Priorities found that
“higher marginal income tax rates have a very small impact on where people decide to live,” and added
that such increases raise significant amounts of revenue. One particularly relevant analysis of a tax
increase on high income earners looked at a 2004 marginal tax rate increase in New Jersey. It found that
the tax “generated more than $1 billion for Tax Year 2006” while leading to a mere $37.7 million per
year in lost revenue.
Applying a similar measure here in New York would be incredibly beneficial, and I ask you to consider
doing so to help bridge our massive budget deficit. A comparable marginal tax rate increase would affect
only a very small percentage of New Yorkers, but would raise significant amounts of revenue when it is
desperately needed to help our most vulnerable citizens.
In times that call for “shared sacrifice,” we must make sure that all our state’s residents, including our
wealthiest, are asked to participate in the solution and to shoulder a fair share of the burden. We should
follow the lead of our neighbor state to ensure that those most able to help in these difficult economic
times do so. I strongly support and ask you to consider a proposal to increase the marginal tax rate on
income earned over $1 million.
Very truly yours,

Daniel O’Donnell
Assembly Member
th
DISTRICT OFFICE: 245 West 104 Street, New York, New York 10025 (212) 866-3970 Fax (212) 864-1095
ALBANY OFFICE: Room 819, Legislative Office Building, Albany, New York 12248 (518) 455-5603 Fax: (518) 455-3812
E-MAIL: odonned@assembly.state.ny.us