Speculated Upsides for New Yorker’s Taxes under a Republican Administration
If 2017’s steep tax cuts are extended prior to their sunset at the end of 2025 as projected by the stock markets, it “would be a boon for wealthy New Yorkers who would likely have faced higher tax bills” in a Democratic-controlled administration. Since “the tax cuts are regressive, they will benefit high-income households more so than middle-income and lower income households” according to reported statements by Barbara Denham, a senior economist at Oxford Economics. Approximately 10% of New York households earn $300,000 a year or more, surpassing the 6% share of households that earn that much across the U.S., indicating the potential of a boost in consumer spending being higher in New York than in other U.S. cities. In addition, if a promised income tax exemption on tips and overtime pay moves forward, it would give a boost to the city’s lower-wage workers, of which more than 320,000, or 7% of the city’s workforce are employed in food service and drinking establishments. It is also anticipated by the nonpartisan Tax Foundation that an itemized deduction of auto-loan interest would be created, while there’s also a chance Congress will raise the current $10,000 limit deduction of state and local tax (SALT) payments on federal returns to $20,000 a year, having reportedly been lowered from previously being unlimited to raise revenue lost by cutting taxes on businesses. However, it is anticipated that getting a new tax package through Congress this time will be more challenging than during president-elect Donald Trump’s previous term, since “there’s no sign the Republican Senate and razor-thin Republican House majority are anywhere close to agreeing amongst themselves, not to mention the incoming administration,” according to reported comments by Sarah Bianchi, the former deputy U.S. Trade Representative who is now an analyst at securities Evercore SI — a challenge that could be further heightened by the concerns of the more fiscally-minded lawmakers that “deficits will rise if an already expensive tax cut is extended.”