Contrary to Cuomo's Predictions: Trump Tax Reform Benefits New Yorkers

Critics of tax reform believed that the innovation would benefit only the rich. However, the majority of New Yorkers won, for whom the tax burden was reduced by 1,3%. How this affected different parts of the state, the newspaper writes New York Post.

About the reform

Federal taxes paid by New Yorkers fell by nearly $ 3,4 billion, or 2,4%, in 2018, the first year of Donald Trump's tax reform. This is evidenced by new study resultspublished on September 3rd.

The Empire Center analysis refutes Gov. Andrew Cuomo's claims that New Yorkers will pay nearly $ 15 billion more as a result of the law.

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Analyst E.J. EJ McMahon said cuts in tax rates and higher standard deductions would offset the impact of the restrictions on local tax deductions. Research based on data from the Internal Revenue Service (IRS).

“With the expanded standard deductions and tax cuts in the Tax Cuts and Jobs Act (TCJA - the official name of the Trump Tax Reform Act), it has always been clear that the new tax law will result in tax savings for most New Yorkers. And new data confirms this: taxes paid by New Yorkers have dropped across all income ranges to $ 500, ”McMahon said.

He added: “Overall, this is a progressive tax cut. TCJA cuts taxes for low- and middle-income people and shifts the tax burden to those with higher incomes. "

Who has benefited the most from tax reform?

Total taxes paid in the 12 higher-income counties of the state, including New York City, decreased by just 0,7%. While the decline in lower-income counties was 6,3%, this is even more than the 4,5% decline in the national average.

In the city New York residents paid 1,3% less federal taxes.

Residents won the most Bronx и Staten Islandfor which taxes decreased by 4,6% and 4,3%, respectively. Resident taxes Manhattan и Queens were also cut - 1,7% for both boroughs.

And only in Brooklyn they grew by 1,7%.

Taxes jumped 2% in state's wealthiest county Westchester, and 1,2% for county taxpayers Nassau.

In District Suffolk - decreased by 2,1%.

Typically, Democrats advocate progressive tax policies that include higher rates for wealthy taxpayers and lower rates for low- and middle-income taxpayers.

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But Cuomo said he opposed the TCJA because the reform forces New Yorkers to subsidize tax cuts in Republican states and encourages the richest residents (they provide nearly half of New York City's tax revenue) to move to states that levy lower taxes. Even a small outflow will cut New York's tax base, Cuomo is convinced.

Cuomo's Budget Office on Thursday, September 3, rejected the report and called the Empire Center "a shadowy think tank of the right."

How the reform affected other states

In fact, the analysis shows that some southern and mostly Republican states with lower incomes benefited more from the reform than others. For example, federal taxes paid by residents Arkansasfell by 11,5%. In Florida they decreased by 11,3%, and by 9,8% in Texas.

Reducing taxes in the state New York amounted to about half of the average decline in the country - 4,5%.

Only six other states have benefited less from tax reform than New York. Some of them even suffered losses. For example, in the state Nevada taxpayers paid 1,7% more to the feds and residents California - by 1,1%.