The state’s 4 percent surtax on income over $1 million is now in effect. The new tax raises critical policy questions related to its effect on long-term economic growth and its impact on other areas of the tax code. At the same time, the surtax creates a number of fiscal and tax policy questions. This brief:
- Lays out the fiscal challenges with collecting, tracking, and using surtax revenues and presents a recommended approach to address those challenges as part of the FY 2024 budget development process;
- Identifies a number of implementation questions related to the surtax that must be clarified for taxpayers and policymakers.