By Forum Staff
After the Affordable Healthcare Act repeal-and-replace debacle, President Donald Trump has highlighted tax reform as next on the Oval Office agenda.
City Comptroller Scott Stringer recently released a new analysis that shows that the Trump administration’s tax plan, as proposed during his campaign, would provide significant tax cuts to nearly all millionaires in NYC — like Trump himself — while actually raising taxes on many single parents, moderate- and middle-income New Yorkers, and working families.
According to “Proposed Changes to Federal Income Tax Law Under the Trump Plan and the Effect on New York City Taxpayers,” more than 95 percent of City taxpayers with incomes between $500,000 and $1 million, as well as more than 90 percent of those with incomes above $1 million, would pay the same or less in taxes than they do today. Yet, nearly 40 percent of single parents in the five boroughs would face higher tax liability. The tax plan proposed during Trump’s presidential run is also projected to cost $2 trillion or more in lost federal revenue over the next decade, Stringer noted.
“What Trump promised during the campaign looks like a tax plan created for the Mar-a-Lago elites. It’s written by millionaires, for millionaires. President Trump wants to give his friends — and himself — a big tax cut, and force working New Yorkers to pay for it. It’s a plan that exacerbates wealth gaps at the expense of low-income, single parents,” Stringer added. “If President Trump moves forward with the tax plan he proposed during the campaign, I believe it will take New York backwards. Embracing ‘trickle-down’ has never helped working families move up the economic ladder — it’s a sleight-of-hand that helps America’s wealthiest.”
The Comptroller’s Office’s review of the Trump tax plan found:
More than one-third of moderate- and middle-income families would see tax increases – while the highest earners in the City would benefit the most.
The wealthier the New Yorker, the higher the benefit. Generally, the plan provides high income filers (with federal adjusted gross income in excess of $500,000) with significant tax reductions through lower marginal tax rate cuts on ordinary and capital gains income and the elimination of the alternative minimum tax.
Among moderate-income families, single parents specifically would face significant tax increases, if the “Head of Household” filing status is eliminated.
Nearly half of single filers with incomes between $100,000 and $500,000 also stand to lose under the proposed plan.
More than one-third of filers with income between $50,000 and $250,000 would be worse off under the proposed plan.
The overall agenda would provide tax cuts to NYC residents in excess of $5 billion annually, but almost two-thirds of the cuts would go to filers making more than $500,000.
While the majority of residents would see a very modest decrease in liability, the potential funding cuts to the five boroughs in order to pay for the overall tax plan could be significant.
The estimated cost over a 10-year period to the federal government of the Trump income tax proposal ranges from $2.2 trillion to $3.3 trillion. In order to pay for it – as well as significantly higher military spending, a potential border wall, and other projects –Trump will likely propose cuts in federal aid to state and local governments.
As such, whatever modest tax benefit middle-income New Yorkers might receive would likely be offset by declining quality of life due to cuts to social services and other programs, Stringer noted.