According to a new report by S&P Global Ratings, Delaware County is among 117 counties across the nation most “at risk” of pressure from high-income taxpayers after changes to the tax policy, writes Joseph DiStefano for the Philadelphia Inquirer.
The Tax Cuts and Jobs Act of 2017 both reduced federal tax rates and deductions for people who pay substantial state and local taxes.
S&P has identified counties in the Top 10 percent where taxpayers itemize their federal tax benefits, and state and local tax deductions went over the new limit of $10,000 a year. The report found that the hardest-hit areas include many of the nation’s wealthiest counties.
It states that by effectively increasing the state and local tax burden, “the Tax Act may dampen incentives to buy higher-priced homes, or at least decrease demand for houses where the combination of state and local taxes paid by a taxpayer” is more than $10,000 a year.
S&P also predicts an adverse reaction in areas where the rich no longer qualify for big breaks.
“Constituents who feel squeezed under the new tax regime may not be interested in supporting a tax-rate increase,” the report reads.
Read more about the report’s findings in the Philadelphia Inquirer by clicking here.