Gov. Kathy Hochul (D-NY) is trying to build the trust of working class voters within her state with a tax cut for joint filers earning less than $320,000.
Hochul announced the plan and the rest of her agenda during her State of the State address on Tuesday.
“The dollar doesn’t stretch as far as it used to, which is why Governor Hochul will fight to deliver
significant tax relief to middle class families—helping more workers hold on to more of their hard-won paychecks,” her plan detailed.
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The tax cut would be phased in over two years and aims to reduce the taxes of one of the most expensive states for income tax. The Tax Foundation, a nonpartisan tax policy 501(c)(3) nonprofit, ranked New York last on their State Tax Competitiveness index, which measures how well states structure their tax systems. They also ranked last in their individual income tax list.
The plan is another attempt from Hochul to appeal to voters who have protested the state’s lack of affordability. She also announced several other initiatives to lower costs for residents of the state, including expanding the child tax credit, an inflation rebate that will give New Yorkers a few hundred dollars depending on their income level, and restoring SALT deductibility when the cap expires in 2025.
“Families shouldn’t have to worry about whether or not they can afford to put food on the table because of the rising cost of groceries,” Hochul said. “Making New York more affordable has been one of my top priorities and to continue this commitment, I am proposing a substantial tax cut for middle class New Yorkers to lighten the burdens of inflation.”
Progressives from within Hochul’s party acknowledge her affordability moves will help her in her 2026 reelection bid.
“She realizes like many Democrats after the last election cycle that working-class people feel isolated or not taken care of by the Democratic Party and she’s attempting to make a bridge and show up,” Working Families Party Co-Director Jasmine Gripper told Politico.
But she’s expected to find some conflict within her own party on the tax fight, especially if the missed tax revenue is taken from other services. “New Yorkers don’t want you to cut their taxes here and then cut their services someplace else,” Gripper said.
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New York Republicans in the state’s legislature will all likely be on board with cutting the state’s taxes, but Democrats who hold a supermajority in the state Assembly and a substantial majority in the state Senate could be more skeptical.
“Her problem is she has a Legislature that I don’t think necessarily agrees with that,” Assembly Minority Leader Will Barclay said. “We’ll see how she’s able to overcome that.”