NEW YORK CITY—On the driveway of a home in Bethlehem, a suburb outside of Albany, Gov. Andrew Cuomo and the Senate Minority Leader Chuck Schumer (D-NY) announced their statewide push to urge congressional representatives to oppose the repeal or reduction of state and local, including property tax deductions from federal returns.
At Monday's news conference with upstate New York homeowners, Schumer called the Republican tax proposal a “gut-punch to Rochester and Western New York's middle class.” He noted more than 22% of Western New Yorkers used the state and local tax (SALT) deduction, and the average tax payer in the region could lose nearly $12,000 by the elimination of that deduction, alone.
Gov. Cuomo released an analysis by the New York State Department of Taxation and Finance. It calculated the tax plan would amount to 3.3 million New York taxpayers having their tax burden increase by $17.5 billion. He said under the proposal, New York taxpayers will have to pay on average $5,300 more in federal income taxes.
On Long Island, alone, the report projected nearly a million taxpayers would experience an average federal tax increase of more than $4,500 and approximately 600,000 taxpayers in the Mid-Hudson region would see their taxes rise by nearly $5,600.
Cuomo says what the tax reform proponents call a “tax cut” for other states amounts to a “tax increase” to New Yorkers. Across New York, the deduction loss would total approximately $68 billion per year.
“The elimination of state and local tax deductibility is a death blow to New Yorkers and to our economy,” said Cuomo. “Every member of our Congressional delegation must do everything they can to stop this devastating proposal.”
As reported by GlobeSt.com, the New York CRE community has expressed strong opposition to the federal tax reform framework. At Monday's event, the real estate community voiced support for the congressional delegation's initiative. Duncan MacKenzie, the State Association of Realtors CEO, reiterated that home ownership is a keystone to strong societies and a foundation for building wealth.
“We support efforts to reform the federal tax code to create a more simplified and fair system,” said MacKenzie. “But eliminating the deduction of state and local taxes including property taxes, will only serve to hurt New Yorkers disproportionately compared to other states.”
The so-called “Big 6” reference came from the working group of six exclusively Republican members who created the nine-page tax proposal that included the SALT deduction elimination.
However, several New York Republican politicians including Rep. Pete King (2nd District) vehemently oppose the tax reform. Congressman King co-authored a Newsday editorial with Democratic Rep. Thomas Suozzi (3rd District). They emphasized that New Yorkers pay some of the highest state and local taxes.
Quoting the Rockefeller Institute of Government, a public policy think tank, the congressmen pointed out that New York sends $48 billion more to the federal government than it receives back—more than any other state.
King and Suozzi wrote, “Regardless of party affiliation, officials in Washington must understand that ending the deductions would be bad for New York, bad for Long Island and bad for all of our constituents.”
There are 27 members of the House of Representatives from New York. In addition to King, the Republican congressional members are Lee Zeldin (1st District), Daniel Donovan Jr (11th District), John Faso (19th District), Elise Stefanik (21st District), Claudia Tenney (22nd District), Tom Reed II (23rd District), John Katko (24th District), and Chris Collins (27th District).
The proposed reform would reduce the number of tax brackets from seven to three. Proponents say the increases in the standard deduction to $12,000 for individuals and $24,000 for married couples would account for deduction losses, including the elimination of the SALT deduction.
The Associated Press has reported that President Trump is pushing the GOP to get him the tax reform bill to sign by Thanksgiving.
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Betsy Kim
Betsy Kim was the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
