Comptroller Stringer Analysis: Trump’s Plan to Eliminate State and Local Deductions Will Raise Taxes on Everyday New Yorkers
June 7, 2017
Roughly 1.3 million taxpayers in New York City will face higher tax bills with this provision alone — 60% of them low- and middle-income households
A family making $75,000 a year would pay $1,800 more in taxes
(New York, NY) — New York City Comptroller Scott M. Stringer today released a new analysis of the impact on New Yorkers of eliminating the deductibility of state and local taxes, which is an element of the Trump Administration’s broader tax reform blueprint. The new research brief found that eliminating the state and local tax deduction would hike taxes for nearly 1.3 million New Yorkers — roughly one-third of Federal taxpayers in the City —increasing the total tax liability for New York City residents by $7 billion. Moreover, nearly 60 percent of those facing higher tax bills would be low- or middle-income New York City families.
The Comptroller’s Office analysis reveals that the proposal would affect New Yorkers from every corner of the City. Although President Trump said last week that the plan was moving through Congress, many important elements of the proposal remain to be worked out, and neither the Administration nor Congress have yet produced draft legislation.
“When it comes to this White House, every day seems to bring another policy that helps billionaires, hurts everyday Americans, or both. We’re watching closely and crunching the numbers, and by raising taxes on over one million middle-class New Yorkers, it’s become clearer than ever that this White House has no intention of having an economy built on fairness. Eliminating this deduction will impact New Yorkers in every borough — it’s huge,” New York City Comptroller Scott M. Stringer said. “President Trump says one thing in words, another in his tweets, and even yet another thing on paper. We are going to continue to watch his tax plans closely and give working families the information they need to understand how White House policies affect them.”
Since 1913 — when the current federal Personal Income Tax was created — Americans who itemize their taxes have been able to deduct the cost of state and local taxes from their federal taxes. Currently, 1.3 million New Yorkers benefit from this deduction, and would see their federal taxes increase if Trump’s tax plan passed.
Comptroller Stringer’s analysis found that this tax cut affects middle-class New Yorkers from across the five boroughs. For example, a family making $75,000 a year would have to pay $1,800 more in federal taxes if this deduction were eliminated.
The analysis found that if the state and local tax deductions were eliminated, as proposed in Trump’s tax plan:
- New York City residents collectively would see federal tax bills jump by a total of $7 billion — with a median household tax increase of $2,200;
- 3 million New Yorkers — roughly one-third of taxpayers — would see their federal income taxes increase after losing state and local exemptions. Of them:
- 71,400 make less than $25,000 per year. These taxpayers would see a median tax increase of $253 or 1.6% of their disposable income;
- 201,200 have incomes between $25,000 and $50,000. These New Yorkers would see a median tax hike of $446 — 1.1% of their disposable income;
- 244,450 make between $50,000 and $75,000 and would see a median tax increase of $1,009, losing 1.7% of their disposable income.
- 222,140 have incomes between $75,000 and $100,000. These taxpayers would see a median tax hike of $1,784 — or 2.1% of their disposable income.
- All told, 740,000 of the 1.3 million New Yorkers who would face tax increases after losing these exemptions — about 60 percent — have low- or moderate-incomes and make less than $100,000 a year;
- One in five taxpayers with incomes between $25,000 and $50,000 would see their taxes increase as a result of losing this single deduction;
- Nearly half of all middle-class New Yorkers who make between $50,000 and $75,000 would face higher taxes because of this roll-back;
- Almost 75 percent of New Yorkers making between $75,000 and $100,000 would face higher tax bills.
- The 1.3 million New Yorkers who would face higher taxes live in all five boroughs:
- 389,000 in Manhattan;
- 336,000 in Queens;
- 323,000 in Brooklyn;
- 136,000 in the Bronx; and
- 97,000 in Staten Island.
To read the full analysis, click here.