Nearly all of New York City's millionaires would receive big tax cuts under President Donald Trump's proposed tax overhaul, while more than one-third of moderate- and middle-income families would face increases, according to a government report issued Thursday.
City Comptroller Scott Stringer said Trump's overall plan, as proposed during the Republican president's campaign, would give more than $5 billion of tax cuts to city dwellers. But almost two-thirds of that would go to those earning more than $500,000. That group bears just over one-half of the total tax burden.
"We already have astounding wealth gaps across the city and across the country," Stringer said at a news conference. "The Trump tax code, if implemented, would only exacerbate it."
The lower taxes for wealthier residents would be achieved through lower marginal tax rates on ordinary and capital gains income and the elimination of the alternative minimum tax (AMT) — a federal income tax that's required in addition to baseline income tax for certain individuals or entities for which exemptions allow lower payments of standard income tax.
Last week, U.S. Treasury Secretary Steven Mnuchin said Trump's objective was a tax cut for the middle class, not the top 1 percent. He said he was aiming for passage of a comprehensive tax overhaul by the time Congress takes its August recess.
Six-figure tax cut
Stringer's office analyzed tax returns of 365,000 New York City households. It found that 92 percent of the city's millionaires would receive, on average, a tax cut of at least $113,000.
Nearly half of single parents who make $25,000 to $50,000 would experience a tax increase, it said.
The tax cuts, which would reduce federal revenue by more than $2 trillion over 10 years, are driving proposed budget cuts that would leave the city, home to 60,000 homeless people, with a weakened social safety net, Stringer said.
"I find it incredible that this guy, who comes from New York City, who has major investments here, can't see what his proposal will do to his hometown," he said. "And then when you scratch the surface, you realize that part of his agenda and who benefits from it is Donald Trump himself."
Based on the limited information available from Trump's now-public 2005 federal tax return, his proposal to eliminate the AMT would have benefited him by $31 million that year. In contrast, under his tax plan, a single mother raising two children on less than $50,000 a year would face a tax increase of $464.