Schumer wants Pence to explain plan to end tax deduction popular in New York - The Buffalo News

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Schumer wants Pence to explain plan to end tax deduction popular in New York

ALBANY – On the eve of Vice President Mike Pence’s visit to the Buffalo area, Senate Minority Leader Charles E. Schumer on Monday urged New Yorkers to demand an explanation about Republican proposals to eliminate a major federal tax deduction used by millions of state residents.

“When Vice President Pence arrives in Buffalo I hope he’s prepared to explain why he wants to hike taxes on thousands of middle class families in Western New York and across New York State,’’ Schumer said Monday afternoon in an interview.

Pence is due to land in Buffalo at 11:45 a.m. Tuesday for a meeting with business executives and “New York families” in a session the White House billed as a discussion on “the need for tax reform in the United States.’’

A key way the White House and many congressional Republicans plan to pay for a recently proposed tax package is eliminating federal deductions for state and local taxes. It would provide an estimated $1.3 trillion to fund the tax plan Republicans hope to pass before the end of the year.

New York residents are a major user of the deduction, and the state has estimated 3.3 million New York filers would see a tax increase, totaling an extra $17.5 billion for Washington.

In three individual congressional districts in Western New York, Schumer said between 22 percent and 29 percent of filers take the state and local tax deductions on federal taxes, averaging about $12,000.

“I would ask Western New Yorkers to ask why he’s for this,’’ Schumer said of Pence.

Asked about Pence coming to New York State, where the deduction has been so heavily used, Schumer said, “I’m glad he’s coming to Western New York because at least we can bring the fight right to him instead of (Pence) hiding.’’

Schumer said removing the state and local tax matter from the tax package negotiations would make a deal easier to reach. “There are grounds for compromise but state and local deductions, at least for New Yorkers, should make it a non-starter,’’ the Senate Democratic leader said.

U.S. Rep. Chris Collins, a Republican from Clarence, will join Pence at the event and a fundraiser being held for the congressman. The visit by Pence with Collins comes less than a week after the Office of Congressional Ethics said there was a “substantial reason to believe” that Collins violated federal law and House rules for possibly sharing insider information with investors about an Australian pharmaceutical company. The investigation is ongoing.

The state tax department recently estimated 3.3 million New Yorkers would see a tax increase if the deduction is eliminated. Of those, about 1.2 million have incomes between $50,000 and $100,000 and they would face an average federal tax increase of $1,300. Nearly 700,000 filers earning between $100,000 and $150,000 take the deduction and 6,900 filers, mostly downstate, with taxable incomes over $5 million annually use it; those wealthy taxpayers would see an average tax increase of about $660,000, the tax agency estimated.

Republicans have said the blow of eliminating the state and local deductions will be offset by their plan that calls for doubling the amount of the standard deduction. But the GOP plan also seeks to get rid of existing personal exemptions taxpayers can now take.

The deduction on state and local taxes traces its roots to a Civil War tax law. It is taken by more than 40 million U.S. filers. Six states – California, New York, New Jersey, Illinois, Texas and Pennsylvania – account for more than half the deduction’s value, according to the Tax Foundation.

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