October 25, 2017
New York Report: How the Republican Tax Giveaway to the Wealthy Would Hurt New York Families
- The Republican tax plan would actually raise taxes on about 2.1 million New York households next year.
- In New York, 3.4 million households deduct state and local taxes, with an average deduction of $22,169. The Republican plan eliminates this deduction.
- 2 million New York households deduct their mortgage interest payments. Under the Republican tax plan, this deduction would become useless for most families unless their home was worth more than $801,000 – more than twice the median home value in New York of $304,300.
Tax hikes on the middle class:
- The Republican tax plan would raise taxes on about 2.1 million New York
households, or 22.1 percent of households in 2018. [IRS, 2015; ITEP, 2017]
- The average tax increase on families nationwide earning up to $86,100 would be $794, a significant burden for middle-class families. Here’s what New York households could do with that money:
o Pay for 0.8 months of child care
o Pay for 7.1 months of electric bills
o Pay for 2.0 months of health care premiums [JEC, 2017]
- According to the IRS, 35 percent of tax filers, or 3.4 million New York households, deduct their state and local taxes with an average deduction of $22,169 in 2015. President Trump’s plan eliminates this deduction, which would lower home values and put pressure on states and towns to collect revenues they depend on to fund schools, roads, and vital public resources. [IRS, 2015; GFOA, 2015]
- In 2015, 2 million New York tax filers deducted their mortgage interest payments from their taxes. By doubling the standard deduction and eliminating the State and Local Tax deduction, Trump’s plan would make the mortgage interest deduction useless for most of those with homes valued under $801,000, more than twice the $304,300 value of the median New York home. [IRS, 2015; Zillow, 2017]
- Middle-class families in New York making between $39,700 and $66,300 per year who do benefit see only 5.3 percent of the total benefits of the tax plan.
- [ITEP, 2017]
Tax cuts for the wealthiest:
- The Institute on Taxation and Economic Policy finds that millionaires in New York (50,080 total, or 0.52 percent of filers in 2015) would receive 73.4 percent of the benefits from the tax plan. [ITEP, 2017]
- In New York, only 470 total estates (0.3 percent of all estates) are subject to estate tax, which only affects people whose estates are worth more than $5.5 million ($10.98 million for couples). [CBPP 2015]
Leaving working families behind:
- The Republican plan eliminates the personal exemption, which deducts $4,050 for each taxpayer and dependent on a return from taxable income. In New York, 5.5 million dependent exemptions were claimed in 2015. [IRS, 2015]
- Republicans in Congress have already taken aim at the Earned Income Tax Credit, which encourages work for 1.8 million low-income individuals in New York,
helping them make ends meet with an average credit of $2,326. [IRS, 2015; CBPP 2014]
- The EITC and the Child Tax Credit lift, on average, 597,000 New Yorkers (including 307,000 children) out of poverty each year. [CBPP, 2014]
*Calculations based on 9,614,610 returns filed in 2015. [IRS, 2015] 2