CNBC has just produced the first analysis of what the House Democrats new tax proposal would do to the overall tax rate of the wealthiest class of taxpayers.
Top earners in NYC would face a combined city, state and federal income tax rate of 61.2%. For the top marginal federal income tax rate – which is the rate that taxpayers pay on every dollar of earned income above the threshold – would be 46.6%. In NYC, the combined top marginal state and city tax rate is 14.8%. So, city taxpayers who earn more than $5M a year would face a combined city, state and federal marginal rate of 61.2% if the House plan becomes law.
These would be among the highest tax rates seen in the last 40 years. Top-earning Californians would face a combined marginal rate of 59.7%, while those in New Jersey would face a combined rate of 57.2%. Hawaii could face a combined rate of up to 57.4%.
Meanwhile, there are no signs that the House will roll back any of the less popular tax hikes from the Trump plan, such as the SALT (sales and local tax) deduction cap. However, some sources close to CNBC said it’s possible the House might seek to scrap the SALT deduction cap at a later time.