By Andrew M. Cuomo
Washington’s “tax reform” proposal is being rushed through Congress with little discussion and transparency. Why? Because if Americans knew the facts, it would be dead on arrival.
The plan is a death blow to New York State. This federal scheme proposes to cut taxes for the richest Americans and corporations, while financing these cuts at the expense of our middle-class families in states like New York. Their plan calls for the elimination of the current tax deduction for state and local taxes. This hurts New York, California and 10 other states hardest.
New York has high property taxes, and we have been actively reducing them through the 2 percent property tax cap and pushing local governments to share services. Still, on average taxpayers pay approximately $5,750 per household. Currently this tax payment, along with state income tax payments, can be deducted from federal income taxes. However, if Washington has its way, these deductions would be eliminated – raising most middle-class families’ taxes $5,300 on average.
This is a gross injustice to New York State that would devastate our economy and would make us less competitive at attracting businesses and people. It would reverse all the gains we have made over the past years in reducing state spending and taxes to record lows. Why would Congress do this? Pure politics.
New York is the piggy bank while other states get the benefit. There is no government rationale to justify this theft. New York State is already the No. 1 donor state in the nation, meaning we give the federal government more money than we get back, and we get back a lower percentage than any other state. We receive $48 billion less from Washington than we send. The Comptroller’s Office recently projected the tax cut for other states would cost New York $72 billion in deductions.
This is not a partisan issue for New York. It hurts Democrats, Republicans and independents. In fact, every Democratic Congress member from New York is against it, and seven of nine Republicans are against it. The two representatives who support it are critical to its passage – Congressmen Chris Collins and Tom Reed. They are the Benedict Arnolds of their time because they are putting their own political benefit above the best interests of their constituents.
Collins and Reed are feeling the heat and are offering a “compromise” that the elimination of the deductions will be only for higher-income households. New Yorkers are not stupid. If you increase taxes on the higher-income people, they will leave the county or the state and take their tax dollars with them, thus increasing taxes on those remaining taxpayers.
It is ironic that with this position the only argument Collins and Reed have left to justify their treason is totally contrary to all their Republican rhetoric: now they want to increase taxes on the rich in their districts. It would be funny if it wasn’t so dangerous.
Their second option for compromise is to disallow the deduction for state income taxes. For middle-class New York families, the average tax increase attributable to losing that deduction would be $1,715. Even the Republicans can offer no explanation, justification or rationale for this measure, which would directly hurt every person in their districts. Collins and Reed try to dismiss this criticism as a partisan Democratic attack. Really? Then why are they the only two of the nine state Republican Congress members to support this plan?
As I say to the New York State Legislature in Albany, we are Democrats and Republicans, but New Yorkers first. By and large, New York State legislators act that way.
Reed and Collins should remember that, and they should remember that their political bosses’ promises of personal payoffs won’t matter if their constituents vote them out of office.
And their constituents will remember.
Andrew M. Cuomo is governor of the state of New York.