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Q&A

Potential impact of proposed federal tax changes on NYC

5:34:14

·

59 sec

Council Member Justin Brannan inquires about the Independent Budget Office's (IBO) analysis of proposed federal tax changes, particularly regarding pass-through entity taxes (PTET).

  • The proposed limitation on PTET would not impact city and state personal income tax collection but would raise federal tax liabilities for city residents who utilize PTET.
  • IBO expresses concern about how this proposed limitation would change taxpayer behavior if passed.
  • IBO has not yet conducted quantitative analysis on the potential impact on the city economy.
Justin Brannan
5:34:14
In your recently released report you touched on the potential impact of the proposed federal tax changes on city tax revenues and residents.
5:34:24
The report mentions the proposal to limit states' use of a pass through entity tax by restricting certain pass through businesses' ability to fully deduct their P TET payments.
5:34:35
While the proposed limitation on P TET would not have any impact on city state and city personal income tax collection.
5:34:42
It would raise federal tax liabilities for city residents who utilize P TET.
5:34:48
Are you concerned about how this proposed limitation would change taxpayer behavior if it were to pass?
Louisa Chafee
5:34:56
Yes.
Justin Brannan
5:34:58
Have you done any analysis that quantifies the potential impact on the city economy?
Louisa Chafee
5:35:03
We have not yet.
5:35:05
We will once we have data that's dependent for let's say forty eight hours.
Justin Brannan
5:35:13
Okay.
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