President Trump's promise to end state and local deductions—one element of his tax reform blueprint unveiled in April—would raise taxes on over one million middle-class New Yorkers and increase the city's federal tax burden by a whopping $7 billion, according to a new analysis from New York City Comptroller Scott Stringer.
Released Wednesday, the report offers a detailed breakdown of what the proposal would mean for the 1.3 million New Yorkers who currently benefit from these state and local tax deductions, commonly known as SALT. Under the proposal, 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. Currently, SALT is the most popular deduction claimed by city residents, and New York taxpayers are second only to Californians in the total amount they claim for state and local taxes.
"When it comes to this White House, every day seems to bring another policy that helps billionaires, hurts everyday Americans or both," Stringer, a Democrat and vocal Trump critic, said in a statement. "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."
While the Trump administration has previously said that ending the deductions would mainly affect wealthy taxpayers, the comptroller's report 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.
"Eliminating this deduction will impact New Yorkers in every borough — it's huge," Stringer added. Broken down by borough, Stringer estimates that 389,000 of those hurt by the proposal live in Manhattan, 336,000 live in Queens, and 323,000 live in Brooklyn. A combined 233,000 affected taxpayers live in the Bronx and Staten Island.
In March, the comptroller issued a larger report on the impact of the president's many tax promises, which accused the administration of wanting to raise taxes on nearly half of single parents with children and over a third of all New Yorkers who make between $50,000 and $250,000. Meanwhile, more than 90 percent of those with incomes greater than $1 million would be paying the same or less in taxes than they do today, with the tax burden on millionaires decreasing by $113,000 on average.
Whether some or all of Trump's outlined tax plans will make it through congress remains uncertain, as critics allege that he's not yet explained how congress would pay for the massive slash to the corporate tax rate. Those critics include Paul Ryan's tax counsel, who's called the plan for corporate taxes a "magical unicorn" that "cannot even begin to move through Congress" (JPMorgan Chase CEO Jamie Dimon, meanwhile, remains "confident").
If it's Trump's intention to lessen this gap by eliminating popular deductions, the Stringer analysis shows that he'll likely face widespread pushback—already, two of New York's Republican house members, Rep. John Katko and Rep. Claudia Tenney, have expressed concern about voting for any plan that ends SALT. Still, the president is undeterred, claiming last week that a tax-reform bill "is moving along in Congress," despite the fact that such legislation does not currently exist in either the House or Senate.