Buffalo Comptroller Mark J.F. Schroeder may be right: The Brown administration’s effort to shield city residents from the pernicious effects of the new federal tax law may fall short. But we’re glad the mayor is trying, anyway.
The law, poorly vetted and hastily approved in Congress, punishes many New Yorkers by limiting the deducibility of state and local taxes from their federal taxes. To counter the costly effects, which could drive even more people out of New York, the administration of Gov. Andrew M. Cuomo created a workaround, allowing taxpayers to make a charitable contribution that would count toward their local tax bills. To help at the state level, the administration fashioned a method to convert state income taxes to a payroll tax.
It all may fail. The Internal Revenue Service is all but certain to fight the charitable deduction and the payroll maneuver may be too complicated for many people to pursue. It doesn’t matter.
It would have been irresponsible – not to mention politically suicidal – for the Cuomo administration to have forsaken New Yorkers subject to this bad law. And, once the systems were in place, municipalities would be remiss not to offer the opportunity to their taxpayers. That became legally possible last week, when the state issued guidelines for establishing the charities.
In addition to warning about the likely entanglements with the IRS – which Albany says it has anticipated in its approach – Schroeder also cautioned that comparatively few Buffalonians would benefit from the law, which caps the state and local tax deduction at $10,000.
All of that is true, but all New Yorkers have a reason to support this effort, even if it doesn’t benefit them directly. Contrary to rumor, New York City is not a drag on upstate. Indeed, it’s just the opposite: Upstate New York is disproportionately supported by taxes generated in New York City and its suburbs.
Those taxpayers are likely to be harmed by this reckless law. Many of them will consider departing New York because of it and, absent some way to soften the blow, some of them will pack up and go, leaving those who remain to make up the lost revenue. State and local officeholders would have failed a core obligation if they didn’t seek to mitigate the wreckage that this law was designed to create.
This is a trying time for New York. Efforts to deflect the damage of this misbegotten law may fail. Buffalo’s efforts may not pan out. But doing nothing is not an option.