Cuomo, Schumer say cutting 'SALT' deduction would wreak havoc in N.Y. - The Buffalo News

Share this article

print logo

Cuomo, Schumer say cutting 'SALT' deduction would wreak havoc in N.Y.

WASHINGTON – Only a bit more than a quarter of the taxpayers in Western New York take the deduction for state and local taxes that a Republican tax plan would trim by 71 percent -- but Gov. Andrew M. Cuomo and Senate Minority Leader Charles E. Schumer said Monday that cutting the "SALT" deduction would harm the vast majority of taxpayers in the state.

Offering their most detailed argument yet against the GOP tax reform plan, Cuomo and Schumer told reporters on a conference call that there are several reasons why they anticipate widespread damage in the state if residents are no longer able to deduct their state income taxes on their federal return.

For example:

  • The tax plan could boost federal income taxes on wealthy New Yorkers, prompting them to leave the state. Cuomo, a Democrat, said that would force the state to make up lost revenue by increasing taxes on the less wealthy, he said.
  • Home values in the state could drop by as much as 10 percent, Schumer, a New York Democrat, said, citing a report from the PricewaterhouseCoopers accounting firm.
  • Republicans say most taxpayers in the state would not be hurt by the reduction in the SALT deduction because the federal standard deduction would be nearly doubled under the Republican plan, from $12,700 to $24,000 for a married couple filing jointly. But Schumer disagreed, noting that the GOP plan also eliminates the $4,050 personal exemption – which would have the effect of boosting federal taxes for larger families in particular, just because large families would have more members who would lose that exemption.

GOP tax plan would cut some rates, but mean radical changes for WNY

Cuomo and Schumer called on New York's Republican House members – including Rep. Tom Reed of Corning and Rep. Chris Collins of Clarence, who have supported trimming the SALT deduction – to say they would vote against the tax bill unless the SALT deduction is fully restored.

But Reed and Collins showed no sign of wavering.

Repeating his contention that the GOP tax plan will save the average family in his district $1,600 annually, Reed said 99 percent of upstate taxpayers won't be affected by the changes in the SALT deduction.

“Senator Schumer and Governor Cuomo are throwing everything but the kitchen sink in a desperate attempt to protect their rich friends in New York City," said Reed, a member of the tax-writing Ways and Means Committee. "Peddling all kinds of crazy fear tactics, they have truly lost sight of how to help hardworking New Yorkers."

Cuomo said, though, that thanks to the curbing of the SALT deduction, the proposal would dramatically boost the overall amount of money that New Yorkers pay on their federal taxes.

He noted that New York already sends $48 billion more to Washington annually than it gets in federal benefits -- a situation that would get worse under the GOP tax plan.

"You're going to pay for a corporate tax break on the backs of New Yorkers?" he asked.

Schumer said the compromise that Republican House leaders agreed to in the bill – continuing to let homeowners deduct most of their property taxes while ending the deduction for state and local income taxes – still does grievous harm to the state. That's because the compromise eliminates 71 percent of the benefits of the SALT deduction.

"It's as if they are saying: 'Now we'll only chop off three or four of your fingers. Aren't we doing you a big favor?' " Schumer said.

Cuomo and Schumer restated their case in support of the SALT deduction as the Government Finance Officers Association released a report that offered new details on how many taxpayers use that tax break.

That report was completed before Republicans decided to allow deductions for property taxes up to $10,000 per filer while eliminating the deductability of state and local income taxes, so it offers only a partial look at how the GOP tax plan would affect local congressional districts.

In Democratic Rep. Brian Higgins' Buffalo-based 26th congressional district, the report said, 27 percent of taxpayers claimed the state and local tax deduction in 2015. They claimed an average SALT deduction of $12,083.

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

In the 27th district, represented by Collins, 29 percent of taxpayers took the SALT deduction in 2015. There, the tax break averaged $12,125.

And in Reed's 23rd congressional district, 22 percent of filers claimed the SALT deduction, which averaged $11,716.

Collins, like Reed, has remained steadfastly in favor of the GOP tax plan. Collins said the overall lower rates and new tax breaks under the GOP plan would, in essence, negate all of the concerns Cuomo and Schumer detailed.

For example, the plan would benefit families by offering an additional $600 credit for each child, as well as a family tax credit to defray the costs of care for children and other dependents. Combined with the higher standard deduction and lower rates, those measures would mean most New York families would benefit from lower taxes and never even miss the SALT deduction, Collins said.

"The Republican plan puts money in the pockets of hardworking Americans, which will allow them to save to buy a home, a new car, or take a vacation," he said. "This plan is also going to make America competitive again on the world stage spurring economic growth and creating jobs."

Reed and Collins revel in tax compromise that Cuomo and Schumer abhor

But in its report, the Government Finance Officers Association said that some taxpayers might not suffer from the end of the SALT deduction, but noted that many would, and not just in higher-tax states such as New York.

"If SALT were repealed, almost 30 percent of taxpayers, including individuals in every state and in all income brackets, would be adversely impacted," the report said.

There are no comments - be the first to comment