Dear Commons Community,
While there may still be some revisions, it appears that the Repbulican tax bill working its way through Congress will have serious consequences for those of us living in New York. The present bill could send home prices tumbling 10 percent or more in parts of the New York area, according to one economic analysis. It could increase the regional tax burden, complicating companies’ efforts to attract skilled workers. It could make it harder for state and local governments to pay for upgrades to the transit system and other infrastructure. And it could force cuts in federal programs that help immigrants, the elderly and other low-income residents afford the region’s high cost of living. Most significantly, the bill would eliminate the deduction for state and local income taxes, and would cap the deduction for property taxes at $10,000.
According to an analysis in today’s New York Times.
“The tax plan would probably cut taxes for most New Yorkers, at least in the short term. But it has several provisions that local leaders said could pose long-term problems for New York and other urban areas. Mayor Bill de Blasio, in an interview on Monday, estimated that 700,000 New Yorkers would pay more in taxes in the near term.
“The human impact is huge,” Mr. de Blasio said, referring both to the higher taxes some residents would pay and to the services that could be cut as a result of the tax plan. He said his administration had tried for four years to make one of the world’s most expensive cities more affordable by providing public prekindergarten and paid sick leave. “And then along comes the federal government and makes the situation worse,” he said.
Gov. Andrew M. Cuomo of New York, who joined Gov. Jerry Brown of California and New Jersey’s governor-elect, Philip D. Murphy, on a call with reporters on Monday, called the bill “a targeted assault” on their states.
The versions of the bill passed by the House and the Senate have significant differences, which will have to be resolved in a conference committee before the bill can land on President Trump’s desk. The House bill has several provisions that could be especially bad for New York, including the elimination of a kind of tax-exempt bonds that many cities have used for affordable-housing projects. The Senate bill doesn’t include that change, but it does partly maintain the alternative minimum tax, which is aimed at limiting deductions for high earners and therefore disproportionately affects the New York area.
Parts of the bills could be good for New York. Most significantly, the corporate tax cuts contained in both the House and Senate versions would most likely be a boon to New York’s financial sector. That could mean higher returns for investors and bigger bonuses for Wall Street traders — which, in turn, could mean more spending at shops and restaurants and more sales-tax revenue for the city and state.
Still, most experts said there was little doubt the bills would be bad for certain state and local budgets, and for the regional economy.
“It’s not going to be good, I think that’s clear,” said Michael P. Jacobson, who leads the Institute for State and Local Governance at the City University of New York. “And it might well be devastating.”
I guess I hope it will just be bad and not devastating!