(MENAFN) New Yorkers will face hefty tax increases of more than USD43 billion in 2013 if Congress fails to come up with a solution for the so-called fiscal cliff negotiations, Reuters reported, citing New York State Comptroller Thomas DiNapoli.
The federal spending cuts and tax increases, known as the fiscal cliff, are set to go into effect on January 1 unless lawmakers reach a compromise.
DiNapoli said in a statement that New York would face sharp rises in taxes on January 1 for virtually all 8.9 million working in the state.
Recently, Republican leaders in the US House of Representatives said talks with President Barack Obama were deadlocked.
If the fiscal cliff is applied, there would be a 47 percent increase in the payroll tax rate. This would cost New Yorkers USD7.7 billion.
An extra 3.4 million people in the state would have to pay the federal alternative minimum tax in addition to the 500,000 who currently pay it.
From Buffalo to New York City and towns in between, the state and its local governments together would also lose USD609 million in federal aid next year, including USD210 million in education funding, according to Federal Funds Information for the States.
DiNapoli said the state could lose about USD5 billion in federal aid over nine years, citing calculations from the New York State Division of the Budget.
Federal lawmakers have also proposed limiting the tax exemption on municipal bonds as a way to raise revenue, but that would bump up costs for the state and other borrowers, DiNapoli added.