The
tax bill approved by the Senate is many things, offering a huge tax cut
for corporations, lower rates for the wealthy, and a big victory for
Republicans and the White House.
It
is also an economic dagger aimed at high-tax, high-cost and generally
Democratic-leaning areas — most notably New York City and its neighbors.
The
bill, if enacted into law, 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.
That
wouldn’t matter to the more than two-thirds of households nationwide
that take the standard deduction, which would be nearly doubled under
the bill. But in the New York area, high state and local taxes change
the equation. In Manhattan and wealthy suburban counties, close to half
of households itemize their deductions, and many could see an immediate
tax increase.
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Source: The New York Times (via The Empire Report)
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