Trump’s Tax Plan Expected To Hurt Over 1 Million New Yorkers While Helping The Wealthiest: Gothamist
NYC Tax Day March (Scott Lynch / Gothamist)
President Trump‘s proposed tax policy is expected to raise taxes on over one million New Yorkers, the majority of whom are low- and middle-income households, while providing a windfall for wealthy Americans and corporations.
Unveiled Wednesday, the “most sweeping tax overhaul in decades” would lessen the number of personal income tax brackets from seven to three, repeal the estate tax, reduce taxation on business income, and eliminate a host of write-offs relied upon by high-tax states like New York.
According to initial analyses from city and state lawmakers, business leaders, and tax policy experts, the combined effect of the still-vague plan could wind up costing the average New Yorker thousands of dollars.
Most significantly, the policy would remove the federal deduction on state and local taxes, effectively dealing a “death blow” to the 3.2 million New York residents who currently claim that deduction, according to Governor Cuomo. Without it, nearly half of all New Yorkers making between $50,000 and $75,000, and almost three quarters of those making between $75,000 and $100,000, would see their taxes increase, per a June report from NYC Comptroller Scott Stringer.
Bottom line: single parents are paying for tax breaks for millionaires. https://t.co/KVJDADOkfP
— Scott M. Stringer (@NYCComptroller) March 30, 2017
While the Trump administration has claimed that ending the deductions will primarily impact wealthy taxpayers, the comptroller’s report — and a host of politicians and politically-diverse organizations — maintains that this is not the case. Of the 1.3 million New Yorkers who benefit from the tax break, 740,000 are low- or moderate-earners making less than $100,000, Stringer said.
Getting rid of the deduction, according to the Real Estate Board of New York [REBNY] would also “lead to the diminution of basic municipal services for all New Yorkers,” while making the city less competitive for real estate investment.
And even upstate Republicans railed against the proposal, with Rep. Claudia Tenney vowing to fight the provision, and predicting it would “strip primarily middle- and low-income New Yorkers of their only real tax relief.”
Among the other changes to the tax code, Trump‘s plan would reduce the corporate tax rate from 35 percent to 20 percent, while cutting the tax rate for businesses that don’t pay corporate income tax to 25 percent. The change would do nothing to help most small businesses, according to Vox’s Matt Yglesias, while providing larger and more profitable partnerships with a tax cut.
Meanwhile, multinational corporations like Apple, Google, and Facebook would be off the hook for paying any corporate income tax at all, making them one of the runaway winners in the tax rewrite. The other big winner, it seems, would be the president himself, along with a handful of other multimillionaires who’d benefit from the repeal of the estate tax and alternative minimum tax, which requires wealthy Americans pay a minimum tax.
“If President Trump moves forward with the tax plan he proposed during the campaign, I believe it will take New York backwards,” Stringer said. “Embracing ‘trickle-down’ has never helped working families move up the economic ladder — it’s a sleight-of-hand that helps America’s wealthiest.”
While it’s likely that Trump‘s own finances would benefit from the plan, it’s unclear what the exact impact would be, as the president continues to refuse to release his taxes.