Congress dodged the so-called fiscal cliff in part by raising taxes on high incomes. California voters addressed their state's school budget troubles with a surcharge on big incomes. And now Albany has decided to raise revenue with a high income tax rate for people with seven-figure incomes.
Gov. Andrew M. Cuomo and legislative leaders are finalizing a surprise deal to extend a high-tax bracket for the state's top incomes. The bracket, first approved by lawmakers in late 2011 as a temporary response to disappointing revenues, does not expire until the end of 2014. But that year is an election year, and by deciding to renew the bracket now, Mr. Cuomo and lawmakers can avoid debating high tax rates while running for re-election.
Mr. Cuomo, who in 2011 described a new high tax bracket as a "short-term solution" to help the state weather a financial emergency, did not mention his desire to extend the new tax bracket when he publicly announced his budget proposal in January, or in the weeks since as he and his cabinet members have crisscrossed the state, promoting his spending plan to residents.
The Legislature has not held any hearings or debate about the tax proposal, and Mr. Cuomo's office has declined to provide details while it is being negotiated. The State Democratic Party has even broadcast television advertisements praising the lack of any tax increases in the spending plan that Mr. Cuomo proposed.
But the emerging deal follows similar actions in Washington and in other states to improve shaky balance sheets by generating more revenue from those with top incomes. In its deal to resolve the so-called fiscal cliff, Congress agreed in January to raise taxes on individuals with incomes higher than $400,000 and couples with more than $450,000. And in November, at the urging of Gov. Jerry Brown, California voters approved a temporary income tax surcharge on the state's highest incomes.
While some states are moving in the opposite direction — seeking to eliminate income taxes in an effort to spur growth — others like New York are embracing the idea of generating more revenue from those who make the most. Maryland raised income taxes on high incomes last year, and Minnesota is considering an increase this year.
"I think partly there's some recognition that the level of income inequality has grown, and the level of income inequality has especially grown in places like California and New York," said Kim Rueben, a senior fellow at the Tax Policy Center.
In New York, the high-tax bracket, with a marginal rate of 8.82 percent, applies to individuals who make more than $1 million and married couples who make more than $2 million, about 32,000 filers. The negotiators have not finalized the new expiration date of the high bracket. Discussions have included extending it through 2017.
The emerging tax deal is already drawing consternation from fiscal conservatives and business groups. The Partnership for New York City, a leading business group that has supported Mr. Cuomo's agenda, warned that the renewal of the top tax bracket could drive the wealthy to leave the state — an assertion that is disputed by some.
The business group said that the deal to increase federal taxes brought the combined marginal effective tax rate for New York City's highest incomes to 54 percent, and that the extension in Albany would only further the state's reputation for high taxes.
"These are highly mobile people that have options and are being solicited daily by governors of Florida, Texas, Puerto Rico, Utah — lower-tax states — and it feels like Albany was not considering the implications of the combined tax burden," said Kathryn S. Wylde, the president of the Partnership for New York City.
She added, "The reaction I've gotten from people who pay the tax is that clearly this is a message that suggests the state does not really value this very important group of job creators and taxpayers."
Kevin S. Law, the president of the Long Island Association, also a business group, said the tax bracket extension "caught us off guard, because we weren't expecting to deal with it until next year."
"At this point in time, we believe it sends the wrong message, as we're going through this slow and bumpy recovery, to be increasing taxes for anybody," Mr. Law said.