“We’re worried as well as we’re wondering what are we going to tell our kids,” said Cynthia Metcalf, who lives with her husband as well as the youngest of their four children in Mount Kisco, an affluent commuter town. “I just feel like the item’s an attack deliberately set against people through the Northeast or through some other blue states.”
Ms. Metcalf, who teaches history at Westchester Community College, said she had tried to use TurboTax software to estimate how their tax returns would likely be affected. Currently, they can deduct the more than $20,000 a year they pay in school as well as town taxes, as well as the 7 percent of their income that will goes to state taxes. Losing those deductions means the family could wind up paying considerably more, Ms. Metcalf said.
that will prospect has the Metcalfs rethinking their financial future. Ms. Metcalf said she dreaded the prospect of telling her youngest child, Genevieve, a high school senior, that will the college of her choice was beyond their means. as well as she said she as well as her husband might have to accelerate plans to relocate once all their children have left home. Then again, she added, selling their home could become more difficult.
“right now I’m starting to think, who’s going to want to buy our house here in fresh York?” Ms. Metcalf said. “The whole game has shifted.”
Indeed the item has, as well as not just for homeowners. The tax plan would likely probably cut taxes for most fresh Yorkers, at least within the short term. yet the item has several provisions that will local leaders said could pose long-term problems for fresh York as well as some other urban areas. Mayor Bill de Blasio, in an interview on Monday, estimated that will 700,000 fresh Yorkers would likely pay more in taxes within the near term.
“The human impact will be huge,” Mr. de Blasio said, referring both to the higher taxes some residents would likely pay as well as to the services that will could be cut as a result of the tax plan. He said his administration had tried for four years to make one of the globe’s most expensive cities more affordable by providing public prekindergarten as well as paid sick leave. “as well as then along comes the federal government as well as makes the situation worse,” he said.
Gov. Andrew M. Cuomo of fresh York, who joined Gov. Jerry Brown of California as well as fresh 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 as well as 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 will could be especially bad for fresh York, including the elimination of a kind of tax-exempt bonds that will many cities have used for affordable-housing projects. The Senate bill doesn’t include that will change, yet the item does partly maintain the alternative minimum tax, which will be aimed at limiting deductions for high earners as well as therefore disproportionately affects the fresh York area.
Parts of the bills could be not bad for fresh York. Most significantly, the corporate tax cuts contained in both the House as well as Senate versions would likely most likely be a boon to fresh York’s financial sector. that will could mean higher returns for investors as well as bigger bonuses for Wall Street traders — which, in turn, could mean more spending at shops as well as restaurants as well as more sales-tax revenue for the city as well as state.
Still, most experts said there was little doubt the bills would likely be bad for certain state as well as local budgets, as well as for the regional economy.
“the item’s not going to be not bad, I think that will’s clear,” said Michael P. Jacobson, who leads the Institute for State as well as Local Governance at the City University of fresh York. “as well as the item might well be devastating.”
The most damaging elements could take years to play out. The bill would likely add more than $1 trillion to the deficit over a decade, according to Congress’s official scorekeeper. Under a 2010 law, the increased deficit would likely force automatic spending cuts to Medicare as well as some other programs, many of which fresh York as well as some other cities rely on to help their poorest residents.
The most immediate threat could be to the region’s housing market. The tax bill would likely eliminate or make less valuable the tax breaks that will encourage homeownership. that will would likely probably have a minor impact on home prices nationally, yet potentially a big one within the fresh York area, with its expensive homes as well as high property taxes.
An analysis of the Senate bill by Moody’s Analytics concluded that will home prices in Manhattan could fall nearly 10 percent within the coming years because of the bill. Some fresh York as well as fresh Jersey suburbs could be even more vulnerable because property-tax rates are higher there as well as prices are still recovering through the bursting of the housing bubble.
There could also be broader effects. Driving up fresh York’s already high tax burden could undermine the region’s competitiveness by creating the item harder for businesses to recruit as well as retain skilled workers, said Kathryn S. Wylde, president as well as chief executive of the Partnership for fresh York City, a leading business group.
“the item’s our scientists, our entertainers, our teachers, top professors, employees of cultural institutions — the item’s a talent issue,” Ms. Wylde said. “the item’s the entrepreneurs who decide not to locate their company here.”
For the wealthiest fresh Yorkers, meanwhile, the loss of the deduction for state as well as local taxes means they could face a combined tax rate above 50 percent on their income
Already, many wealthy fresh Yorkers try to spend enough time outside the city to avoid paying income taxes as state residents, as well as economists warn that will the tax bill could accelerate that will trend. Goldman Sachs recently estimated that will the loss of the state as well as local tax deduction could eventually lower the number of high-earning fresh York City residents by 2 to 4 percent.
the item wouldn’t take a mass exodus to have a significant impact on state as well as local budgets. According to the city’s Independent Budget Office, fewer than 40,000 fresh Yorkers accounted for 45 percent of taxable income in fresh York City in 2014.
Even if most rich fresh Yorkers stay put, local politicians could find the item harder to raise taxes to pay for services. Mr. de Blasio, for example, has called for a tax on millionaires to help fix the city’s subway system. Mr. Murphy, the fresh Jersey governor-elect, wants a similar tax for public schools.
Without the state as well as local tax deduction, those plans could face more opposition. Already, top Democratic lawmakers in fresh Jersey have hinted they might back away through supporting Mr. Murphy’s millionaire tax if the deduction will be repealed.
Three decades ago, fresh Yorkers defeated a similar effort to repeal the state as well as local tax deduction by rallying opposition through local officials across the country, said Jay Kriegel, who helped lead that will lobbying effort on behalf of local business leaders. The breakneck pace of the latest tax bill left little time for a similar approach.
“Perhaps the biggest difference between ’85 as well as 2017 will be the speed at which these people have worked,” Mr. Kriegel said. “There has not been time to have a serious discussion.”
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