War On The Rich? New York City Could Raise Taxes On Wealthy To Counter Trump's Tax Plan

New York City Mayor Bill de Blasio says wealthy Americans are not paying their fair share. The mayor proposed Monday a "mansion tax" on the sale of properties worth more than $2 million to offset low taxes promised to the nation's elite under President Donald Trump and the Republican-controlled Congress.

"The wealthiest among us have every reason to expect a major new tax break at the federal level given the proposal already put forward by President Trump and the Congress," said de Blasio during budget testimony in Albany. "We think in light of the fact that the wealthiest will be receiving a substantial federal tax break that it's time they pay their fair share in state and local taxes."

De Blasio said his plan would pay for affordable housing for 25,000 senior citizens. The Office of Management and Budget estimated the tax would raise $336 million in fiscal year 2018 alone.

"The people who would be affected certainly can afford this additional tax and the revenue would be used to keep 25,000 seniors in their home at an affordable level," de Blasio said.

Doug Turetsky, of City Hall's Independent Budget Office, said the city's property buyers often look to avoid paying a mortgage recording tax by paying in cash.

"So this proposal enables the city to level the playing field, making the purchase of luxury apartments subject to a similar tax burden as exists on the sales of more modestly priced apartments," Turetsky said.

Trump's tax plan would largely benefit the nation's top 1 percent, with the average millionaire getting an average tax cut of $317,000, according to legal and tax experts. In contrast, a middle class family earning roughly $50,000 a year would get a tax cut of about $560. The plan calls for reducing the current seven tax brackets to three brackets.

Meanwhile, New York state lawmakers are considering raising taxes on individuals who earn more than $2 million. But critics complain the mayor's tax proposal could affect New Yorkers beyond just the very rich because it's not unusual for New York City apartments to sell for $2 million.

“With $2 million you can get a nice two-bedroom,” Joan Kagan, sales manager at TripleMint, a real-estate brokerage, told the Wall Street Journal. “When you think about a family with children who wants to stay here for a little bit of time, they’re the ones that are going to be affected by the tax.”