A new tax hurricane is looming on the horizon. Some may argue that it is designed to bankrupt the population. With already highly taxed Long Islanders directly in the crosshairs.
The newly proposed $3.5T infrastructure bill has undergone another round of revisions as it works its way to passing.
Although the tax hikes in the latest draft may not be as severe as originally proposed, they are likely to financially cripple many US households. With those who are already highly taxed at the greatest risk of being tipped into the red.
While other countries are focused on investing in, designing and building more modern cities for the future, this infrastructure plan for America seems to be focused on rebuilding antique roads and bridges, and increasing taxes and tax enforcement.
The New Tax Stack
Just some of the tax increases we can expect this year from the new legislation include:
- Raising corporate taxes by 5.5%
- Raising federal income taxes by 2.6%
- An additional 3% surcharge on individual income
- A 5% increase in federal capital gains taxes
So, if you own a business, and sell any property, you could be looking at paying at least 16% more out in taxes.
If you’ve already been working six months of the year just to pay taxes, as we do in NY, you’ll now have to work 212 days of each year before you get to keep a single cent of what you earned.
State & Local Taxes
The above does not take into account new and higher state and local taxes.
California Governor Gavin Newsom’s win in the recent recall vote is also likely to lead to more boldness in both coronavirus related restrictions and taxes. The NY Times projects that he will take on the housing sector next.
In NY, and on Long Island we have already been warned of increases in state income taxes, capital gains and sales taxes, and of course, property taxes too.
The Impact On LI Property Owners
All of these taxes are going to impact the finances property owners have to pay the taxes, with income in jeopardy at the same time. You’ll even be taxed on trying to sell your property.
It is all leading to little to gain by owning or investing in properties. Especially with the ending of retirement savings benefits in this bill, and $78M of this tax revenue being dedicated for the IRS specifically to hunt you down to ensure you are all paid up. Even if you leave the state, like 40% of Manhattan did recently.
There may be little you can do about many of these taxes now, but you can and should still challenge your annual property taxes, and save where you can.