WASHINGTON – Two downstate House members have launched a bipartisan effort to fully restore the deductability of state and local taxes, a long-shot effort that nevertheless ramps up the political pressure on Republican lawmakers who supported the recently passed GOP tax overhaul – including Rep. Chris Collins of Clarence and Rep. Tom Reed of Corning.
Rep. Pete King, a Long Island Republican, and Rep. Nita Lowey, a Westchester County Democrat, teamed up late Tuesday to introduce the bill that would overturn one of the most controversial provisions of the GOP tax bill. That new law will limit the deductability of state and local taxes to the first $10,000 paid – a move that's destined to leave many homeowners in expensive New York neighborhoods with higher federal taxes.
King, in a conference call with reporters, acknowledged that the bill will not pass the Republican-led House anytime soon.
“It’s not going to be easy. It’s going to be a long fight,” he said, according to Newsday, a Long Island newspaper.
The bill is a relatively simple one. It would end the new limit on the SALT deduction and allow taxpayers to deduct every cent they pay in taxes to state and local governments, just as they had been able to do since the federal income tax system began to take shape a century ago.
“By effectively eliminating this deduction, the new federal tax law unfairly punishes families living in states that send more money to the federal government than we get back in federal investments," Lowey said. "This is unacceptable, and our bill is a necessary step to providing tax relief – not more burdens – for New York families."
Collins and Reed have faced political pressure because of their support of the GOP tax overhaul.
Collins could not be reached to comment on the King-Lowey proposal, but Reed said he favors bringing back the SALT deduction.
"I am supportive of restoring the SALT deduction, but we have to address the root cause of why New Yorkers face such a high tax burden," Reed said. "We can no longer ignore the tax and spend policy coming out of our state capital. Hard-working folks in Western New York are undoubtedly hurt by the out-of-control spending instituted by Albany, which in effect raises our taxes and drives people out of our state."
Gov. Andrew M. Cuomo lauded King and Lowey for their effort to fully restore the SALT deduction.
"These members are doing what they were elected to do — protect New Yorkers," Cuomo said. "They showed that New York won't take this assault sitting down, and I will continue to do everything possible to right this economic injustice."
But the downstate lawmakers' effort will almost certainly run into strong resistance from both the Republican majorities in Congress and the Trump administration.
Asked about Cuomo's view that cutting the SALT deduction could drive wealthier taxpayers out of high-tax states such as New York – and leave the remaining New Yorkers paying higher taxes, Trump budget director Mick Mulvaney said in November: "Whose fault is that? ... Is it the federal government's fault that New York taxes are so high that they're driving people out of the state?"
Noting that high-state taxes have already prompted people to leave New York, Mulvaney added: "I don't think it's up to the federal government to save New York from its bad decisions."
New York's budget director, Robert Mujica, wasn't exactly impressed with Mulvaney's reasoning.
"New Yorkers pay the federal government $48 billion a year more than it gets back -- unlike Mulvaney's home state of South Carolina, which gets $23 billion more than it pays," Mujica said Wednesday. "Give us our money back and we'll call it even."