The tax plan unveiled by Republicans in the House of Representatives Thursday would disproportionately raise taxes on those living in Northeast states like New York, New Jersey and Connecticut. Many lawmakers from the region, including Republicans, are against the plan.
For high tax states with high housing costs, the GOP plan is sobering. It would eliminate deductions for state and local income taxes while also capping property deductions.
For example, New Yorkers making $75,000 to $100,000 will have to pay taxes on $10,000 more in income. Most of them will see their tax bracket drop from 15 percent to 12 percent. But for households making between $90,000 and 153,000 a year, their tax bracket will remain the same, meaning an overall higher tax bill.
Gov. Andrew Cuomo calls it “double taxation.”
“It is a tax on your taxes,” he said Thursday.
Congressional Republicans, including Reps. Peter King, Dan Donovan, Tom MacArthur and others have signaled they will oppose the bill. Speaking on Fox Business News on Thursday, Rep. Lee Zeldin (R-Long Island) said “Those rich New Yorkers are subsidizing the rest of the country. New York is subsidizing the rest of the country, both in tax policy and spending policy.”
Democrats in the region go further and call the tax plan a scam and a redistribution of wealth from politically liberal states to conservative states. Herman Berliner, a professor of economics at Hofstra University, said, “A redistribution is not the term I would use. But it is certainly very unequal benefits, with the benefits being far greater for residents of other states.”
Also, under the new GOP plan, property tax deductions would be capped at $10,000 and mortgage tax deductions over $500,000. This would hit downstate New York and New Jersey the most where housing is expensive. For example, in Nassau County the average tax bill is $12,000, meaning they will have to pay taxes on that extra $2,000.
Lawmakers from central and northern New York did not specifically come out against the plan, but most did say they would continue to work to ensure deduction of state and local taxes (SALT) remain in the GOP plan.
Statement from Rep. Claudia Tenney (R-New Hartford)
Importantly, this bill is only the start of the tax reform conversation. I will continue to advocate for robust SALT provisions that provide tangible relief to New York taxpayers, small businesses and family farmers. In a state like New York, where taxpayers are beholden to the unaccountable and fiscally irresponsible policies of liberal elites in Albany, the SALT deduction matters. It amounts to real relief for hardworking families. This is why I continue to stand with many of my Republican colleagues from New York in advocating for the inclusion of meaningful SALT provisions in a final tax reform package.
Statement from Rep. John Katko (R-Camillus)
For thirty years, progressives have demanded exactly what this bill does – easing of the tax burden on low and middle income working families and eliminating loopholes. Anyone who dismisses this bill outright should be prepared to explain this discrepancy, and detail why hardworking Americans should continue to be taxed at excessive rates. No bill is perfect, which is why we need to keep this process moving forward. As this measure moves through the House over the coming weeks, I will continue to consult with individuals, families, small businesses and manufacturers across my district and seek their feedback. As I always have, I will advocate in Congress to ensure that this measure is a net win for Central New York.
Statement from Rep. Elise Stefanik (R-Wilsboro)
I will continue to stand up for NY taxpayers as we work towards comprehensive tax reform. The Tax Cuts and Jobs Act released today by the House Ways and Means Committee is a starting point that needs to be improved to ensure that New Yorkers receive the tax relief they deserve. I will be working with my colleagues in the New York delegation to improve this plan to provide real tax relief for New Yorkers and to address the issue of state and local tax deductions. My goal for this process is to make certain that families and businesses in our district receive tax relief.