President Trump's promised tax code overhaul would hurt single parents in New York, hand major tax breaks to millionaires, and cost trillions of dollars in lost federal revenue over the next decade, according to a new report from city Comptroller Scott Stringer.
"If President Trump moves forward with the tax plan he proposed during the campaign, I believe it will take New York backwards," Stringer said. "Embracing 'trickle-down' has never helped working families move up the economic ladder—it's a sleight-of-hand that helps America's wealthiest."
Bottom line: single parents are paying for tax breaks for millionaires. https://t.co/KVJDADOkfP
— Scott M. Stringer (@scottmstringer) March 30, 2017
The report found that Trump's proposed campaign plan would raise taxes for nearly half of single parents with children and over a third of all taxpayers who make between $50,000 and $250,000. Meanwhile, more than 90 percent of those with incomes greater than $1 million would be paying the same or less in taxes than they do today, with the tax burden on millionaires decreasing by $113,000 on average.
The findings represent a marked difference from Trump's campaign trail promises, which often centered on transformative tax breaks for the working class. Treasury Sec. Steve Mnuchin has repeatedly vowed that there will be no absolute tax cut for the upper class. Shortly after the election, Trump told diners at Manhattan's expensive "21" a different story:
— Bradd Jaffy (@BraddJaffy) November 16, 2016
By analyzing tax records from 365,000 New York City households, the report determined the winners and losers of Trump's tax plan by simulating how marginal tax rates would shift for six different income brackets and three filing types. That simulation found that cuts to the corporate tax rate stand to benefit high income filers significantly more than anyone else: Those making over $1 million would save over $200,000 on average, compared to $1,000 for all other filers.
Stringer, a vocal critic of the Trump administration, pulled no punches in discussing the findings, noting that Trump's proposal to eliminate the Alternative Minimum Tax would have saved the president $31 million in 2005—the only year that his tax return is available. "President Trump wants to give his friends—and himself—a big tax cut, and force working New Yorkers to pay for it," Stringer said. "It's written by millionaires, for millionaires. It's a Mar-a-Lago special."
The report comes at a time when Republicans, still reeling from last week's healthcare collapse, have set their sights on tax reform as an immediate priority. But the repeal bill's failure will complicate plans to overhaul the tax code, as continued federal spending on the ACA likely precludes the possibility of cutting corporate taxes without adding to the national debt. After the bill's removal last Friday, Speaker Paul Ryan's conceded that, "This does make tax reform more difficult."
It also remains unclear just how much power the Trump White House will have in pursuing a tax agenda that differs from the one put forth by House Republicans. Compared to Trump's proposal, the House proposal, overseen by Paul Ryan, would actually be more harmful to middle class families. While both plans would benefit the very rich, the nonpartisan Tax Policy Center estimates that 99.6 percent of the tax relief proposed by Ryan would accrue to the wealthiest 1 percent of the country, compared to 50.8 percent in Trump's proposal.
On Thursday, Trump reportedly met with advisors Steve Bannon and Jared Kushner, Treasury Secretary Steven Mnuchin, and executives from the National Economic Council to discuss his options on tax reform. Details from that meeting have not been released, though some lawmakers fear that Trump could come out of these huddles with an entirely different tax proposal than the one he championed during the campaign.
With so much uncertainty ahead, the comptroller's simulation reads more like a thought experiment than an actual forecast; though if Republicans do accomplish their goal of sweeping tax reform, the report's ominous findings may actually be the best-case scenario for middle class New Yorkers.