For a world-class destination, the median income in Miami-Dade County is astoundingly low — a paltry $44,000, according to county estimates. Donald Trump rode into office by promising to help poor Americans get rich, but according to a city-by-city analysis of the new tax plan he and House Republicans are proposing, his so-called tax-reform package would do nothing to help the vast majority of Miami
In fact, if you're a Miami millionaire, you're in for a huge windfall under the Tax Cuts and Jobs Act. The financial-advisory website SmartAsset estimates Miamians making more than $1.5 million in household income per year would pay $28,931 less in annual federal taxes under the plan.
"In most cases (15 out of 20 cities we looked at), it’s the high earners who will see the largest percentage decrease in federal income taxes," SmartAsset writes. "The big winners in those 15 cities are families who make incomes that are greater than 95 percent of all other families."
Percentage-wise, the second-highest income bracket (those making $200,000 or more) would see a 12 percent tax reduction, while millionaires would get a 5 percent break.
The biggest reason the plan does little for Miami is simply that most residents here barely pay taxes as it is. By SmartAsset's calculations, most Miami families don't pay federal income taxes. Plus, there is no state income tax in Florida, so the GOP plan to kill the State and Local Tax (SALT) deduction, which lets people deduct the cost of their state taxes from their federal ones, doesn't apply here.
Across the state, middle-class earners making around $50,000 to $70,000 per year are supposed to see an extremely tiny cut: Tampa residents in that bracket are expected to save a paltry $300 total per year, and returns are projected to be similar statewide. But the state's richest get to pocket the cost of a new Acura ILX sedan every April.
In other cities, removing the SALT deduction would hurt those who pull in millions per year because they can't deduct their large state tax burdens. Wealthy New Yorkers are expected to pay $30,000 more per year in taxes under the plan, for example. But in states that don't collect income tax, including Texas and Florida, the rich would get a cash haul for no apparent reason.
SmartAsset's state-by-state results mesh with other independent analyses of the plan's impacts: The nonpartisan Center on Budget and Policy Priorities wrote Sunday that nearly half the plan's tax cuts would go to people making $500,000 or more. The center also estimates that people earning $1 million or more per year are set to see their after-tax incomes increase 16 times more than those making less than $50,000 annually.
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All of this raises an obvious question: What purpose do these cuts serve? At the most basic level, America needs tax revenue to pay for things such as bridge repairs and public schools. Under the GOP House plan, Miami's poorest residents would shoulder more of the national tax burden in comparison to millionaires who certainly don't need more help buying stuff or investing in South Beach property. (The idea that cutting taxes for the rich or for corporations creates jobs is bunk: Studies show corporate tax cuts, for example, wind up making extra money for CEOs and shareholders.)
As expert financial reporter David Dayen noted this week for Vice, the Tax Cuts and Jobs Act is basically a love note to the very same people implicated this week in both the Panama Papers and the newly released Paradise Papers, two troves of documents that shed light on the ways in which the ultrawealthy shield their money from taxes by moving funds to tax havens such as the Cayman Islands. Corporations do the same thing: The Paradise Papers show Apple, for example, hiding profits in Irish "ghost companies" and other bank accounts in the British island of Jersey (not to be confused with the American trash island of New Jersey).
Thanks to an already skewed and broken tax system, Miami remains America's most unequal city. Thanks to multiple analyses, it appears the Republican tax plan will do little but make the city's income disparities even worse.