NEW YORK—Mayor Bill de Blasio unveiled today a progressive city tax proposal aimed at raising as much as $800 million annually for New York City’s deteriorating subway and bus system. The proposed tax adjustment – levied on fewer than 1% of the city’s wealthiest tax filers – would also allow the city to cut in half subway and bus fares paid by 800,000 low-income New Yorkers.
“Rather than sending the bill to working families and subway and bus riders already feeling the pressure of rising fares and bad service, we are asking the wealthiest in our city to chip in a little extra to help move our transit system into the 21st century,” said Mayor de Blasio. “Instead of searching for a ‘quick fix’ that doesn’t exist, or simply forking over more and more of our tax dollars every year, we have come up with a fair way to finance immediate and long-term transit improvements and to better hold the state accountable for the system’s performance. Our subways and buses are the veins that make life in the greatest city in the world possible. This fair funding source will provide immediate help to straphangers – and it will help New Yorkers get around our city reliably for the next generation and beyond.”
The new tax would increase the city’s highest income tax rate by 0.534%, from 3.876% to 4.41%, on taxable incomes above $500,000 for individuals and above $1 million for couples.
This tax will be paid by an estimated 32,000 New York City tax filers – 0.8% of the city’s filers, about 32,000 people. The tax is projected to raise $700 million in 2018, before rising to $820 million a year by 2022. This new investment will add on to an annual $1.6 billion in city operational support for subways and buses, and a $2.5 billion commitment in 2015 to the long-term needs of the MTA.
The $500 million in revenue dedicated to modernizing our aging subways and buses could support borrowing up to $8 billion for capital upgrades. The mayor believes this funding should be immediately directed toward core infrastructure improvements like signal improvements, new cars and track maintenance, keys to reducing delays and disruptions that have paralyzed the system in recent months.
Half-priced MetroCards for low-income New Yorkers will be financed by an expected $250 million of the revenue raised by this tax. As many as 800,000 New Yorkers are expected to qualify for half-priced MetroCards based on their income levels.