Tax Bill Squeezes Urban America
The Republican tax bill, largely written by lawmakers from rural and Southern red states, is about to squeeze urban America.
The bill would eliminate tax breaks for everything from bike commute subsidies to building charter schools. One break for refinancing municipal bonds — which saved New York City alone $425 million over the past four years — would be gone. A key break for rehabbing old buildings is getting scaled back. At the same time, mayors and county executives are going to face pressure to cut taxes themselves.
The $10,000 cap on state and local income and property tax deductions is by far the biggest blow for high-tax, high-cost-of-living, liberal big cities and their surroundings. The deduction was worth an average of $24,900 to New York County residents and $17,000 to those living in Marin County, Calif., across the bay from San Francisco, according to 2014 IRS data compiled by the Tax Foundation.
Capping the benefit will potentially expose residents of those areas to a higher tax liability and reduce their property values.
That’s immediately challenging civic leaders in those places.