ALBANY – Gov. Andrew M. Cuomo and legislative leaders were poised to announce Tuesday that they had agreed to an overhaul of the tax code that would raise taxes on the wealthy and reduce them for middle-class residents, according to an official briefed on the negotiations.
Lawmakers on Tuesday were returning to the Capitol to discuss the tentative agreement, and they could approve it as early as this week in a special session of the Legislature that Mr. Cuomo was expected to call.
The official said that Mr. Cuomo; Sheldon Silver, the Assembly speaker; and Dean G. Skelos, the Senate majority leader, had agreed on the principles of a tax package, and were hoping to announce the details shortly. It remained possible that a last-minute language disagreement could scuttle the deal, but the elected officials were optimistic Tuesday morning.
The tentative agreement would create multiple new tax brackets and tax rates, and would replace some, but not all, of the revenue to be lost when the state’s so-called millionaires’ tax expires at the end of this month. Mr. Cuomo had called for “comprehensive reform” of the tax code on Sunday.
The deal was also likely to include a compromise on a much-contested plan to legalize the hailing of livery cabs on most New York City streets, according to the official, who spoke on the condition of anonymity because the talks were private.
An agreement would end a yearlong battle over taxation of the wealthy, prompted by the pending expiration of the state’s millionaires’ tax, which is actually a tax surcharge for individuals who earn more than $200,000 a year and couples who earn more than $300,000. Any tax increase for the wealthy would mark a reversal for Mr. Cuomo, a Democrat, who ran for governor last year on a platform of opposing tax increases and said that increasing such taxes would hurt the state by motivating wealthy residents to move elsewhere.
But Mr. Cuomo has come under increasing pressure from Democrats and labor unions in recent weeks as the sluggish economy weakened the state’s financial picture, widening next year’s projected budget gap to as much as $3.5 billion, and the Occupy Wall Street movement directed more attention to the issue of income inequality.