Weighing tax plan’s impact on NYC


Make text smaller Make text larger


Most New Yorkers will see their taxes go down, but the new law could put the city’s businesses at a disadvantage


Photos



  • Manhattan Borough President Gale Brewer organized the Dec. 20 event at John Jay College of Criminal Justice to evaluate the local impact of Republicans’ extensive changes to the federal tax code. Photo: Maurice Penzon




  • Experts evaluated the local impact of Republicans’ extensive changes to the federal tax code at a Dec. 20 event at John Jay College of Criminal Justice organized by Manhattan Borough President Gale Brewer. Photo: Maurice Penzon




Experts discussed the local consequences of Republicans’ federal tax code overhaul last week at a “teach-in” event at John Jay College of Criminal Justice organized by Manhattan Borough President Gale Brewer.

The new tax law, passed by congressional Republicans and signed into law by President Donald Trump on Dec. 22, includes a permanent reduction of the corporate tax rate and individual income tax rate reductions for most Americans that are scheduled to expire in 2025. High income individuals who earn most of the money from salary will see the highest tax increases of any group as a result of the law, said Greg David, professor at CUNY journalism school and columnist with Crains New York Business.

Among the most consequential aspects of the law for many New Yorkers will be its changes to state and local tax deductions. Currently, state and local income taxes and property taxes may be deducted from federal income taxes, but the new law caps the deduction at $10,000. New York has among the highest state and local tax burden of any state, and the change will affect the approximately one-third of New York City residents who itemize deductions on their federal income tax return.

“New York is disadvantaged compared to other states,” said Kathryn Wylde, president and CEO of Partnership for NYC, explaining that while most of the state’s residents will see their income taxes go down, their tax payments will not go down as substantially as those of residents of other, lower-taxed states. As a result, she said, New York businesses will face challenges in attracting skilled professionals to move to the city who could work elsewhere and pay significantly lower taxes.

The changes to state and local tax deductions will prove particularly burdensome to New York homeowners paying high property taxes, prompting some experts to project a downturn in the city’s housing prices and development market as a result of the law. If the city’s residential sales market slows, it could prompt developers to shift away from condo developments, the dominant market segment in Manhattan in recent years, and towards creating more rental units, said Mark Willis, senior policy fellow at the NYU Furman Center.

The new tax law will also likely force the city to come up with more money to meet the goals of the mayor’s affordable housing program, Willis said.

New York City Comptroller Scott Stringer, like many Democrats, fears that Republicans will point to budget deficits, which are projected to grow as a result of the new law, as a justification for future cuts to Social Security and Medicare. “Whatever small tax cuts middle and low income New Yorkers will get from the law will be dwarfed by their loss of health insurance and the coming cuts in social services,” Stringer said.





Make text smaller Make text larger

Comments



MUST READ NEWS

Image Court rules against UWS nursing home
Appellate court finds proposed 20-story nursing home on West 97th Street would violate open space zoning rules; appeal to state’s highest court likely to follow
Image Melee follows GOP club event
NYPD under scrutiny for response to violence following Gavin McInnes event; police seeking 12 individuals
Image Our brother’s keeper

It’s not a smoke-filled back room; it’s a second floor, badly fluorescent-lit space. There aren’t any cigars, just a large bag of pretzels shared...

Image “Grammar Zen”
New Yorkers talk tricky tenses, punctuation passions and more at Ellen Jovin's UWS pop-up table

VIDEOS



Subscribe to our mailing list

* indicates required
Neighborhood Newsletters





MOST READ

Local News
Rally protests developers’ influence
  • Oct 16, 2018
Local News
“Grammar Zen”
  • Oct 15, 2018
Local News
Our brother’s keeper
  • Oct 16, 2018
Local News
Court rules against UWS nursing home
  • Oct 18, 2018
Local News
Melee follows GOP club event
  • Oct 16, 2018

MOST COMMENTED