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High-income New Yorkers can face a total tax rate of 61.2% under the house plan, and Californians can face a tax rate of 59%

The word “tax” was stamped on May 10, 2021 at the headquarters of the Internal Revenue Service (IRS) in Washington, DC, USA.

According to a plan proposed by Democrats in the House of Representatives, New York City’s top-income earners could face a combined city, state, and federal income tax rate of 61.2%.

The proposed plan includes a 3% additional tax on taxpayers who earn more than $ 5 million annually. The plan also calls for raising the maximum marginal income tax rate from the current 37% to 39.6%. The plan not only maintains a net investment income tax of 3.8%, but also applies to certain pass-through companies.

As a result, the maximum federal income tax rate is 46.4%. The marginal tax rate is the tax rate per dollar that exceeds the income standard of the tax rate.

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