Governor Andrew M. Cuomo and U.S. Senate Minority Leader Charles E. Schumer today launched a statewide push across congressional districts to urge New York's delegation to stand up for this state's middle class and oppose the repeal or reduction of state and local tax deductions. Governor Cuomo and Senator Schumer today stood with homeowners from Albany, Rensselaer and Saratoga Counties and urged every New York House member to fight against any effort to repeal or reduce the state and local tax deduction, which thousands of Upstate New Yorkers rely on. If the Republican tax plan were to pass, many New Yorkers could be saddled with a tax increase of thousands of dollars. In Albany County, where average state and local taxes amount to $7,250, this proposal would raise taxes on one in three taxpayers by an average of $3,438. Eliminating or reducing the state and local tax deduction would have ripple effects of decreasing home values in the region and placing pressure on state and local governments to reduce their taxes and cut spending on education and their local fire and police departments.
"While Washington is considering a 'tax cut' plan, what it really amounts to is a "tax increase" plan for New York," Governor Cuomo said. "The elimination of State and Local Tax deductibility is a death blow to New Yorkers and our economy. The current plan only makes it possible to cut taxes for other states by using New York and California as the piggybank. Every member of our Congressional delegation must do everything they can to stop this devastating proposal."
"Whether the savings from these deductions becomes money for home repairs, groceries, school supplies or even the yearly vacation, it belongs in the pockets of New Yorkers, period," said U.S. Senator Charles Schumer. "These deductions should not be eliminated so people making millions of dollars a year can catch a tax break of their own. It simply makes no sense for Congress to eliminate the SALT deduction, which has helped steady the cost of many middle-class families including those living in the Capital Region-it would be double taxation on the middle class. Without state and local deductions potential homeowners may look elsewhere which could devastate the New York State including the Capital and North Country economy. So, today, with Governor Cuomo we are calling on every member of Congress from New York: do the right thing and block this gut-punch to New York's middle-class. In the meantime, I will do everything in my power here in the U.S. Senate to fight this GOP-led effort to end critical mortgage, state and local property tax deductions."
In September, Governor Cuomo released an analysis of the impact of the proposed elimination of state and local tax deductibility, warning that the Washington tax plan imposes a double-tax on New Yorkers. Nationwide, approximately 44 million Americans take advantage of this deduction and a repeal could result in more than $1 trillion in losses for taxpayers and their local communities. Reductions to or the removal of these sorts of tax deductions would hit the Capital Region particularly hard. Governor Cuomo and Senator Schumer have pledged to fight any efforts that would rollback critical savings deductions used by New York's homeowners and taxpayers.
New York is the highest donor state in the country, sending $48 billion more in tax dollars to the federal government than it receives back in federal spending. Under the Republican tax plan, the federal government would take even more revenue from the number one giving state, subsidizing every other state in the nation as a result.
Under the current federal tax system, taxpayers who itemize deductions on their federal income tax returns can deduct state and local real estate and personal property taxes as well as either income taxes or general sales taxes. The Republican Tax Reform Framework would eliminate SALT deduction entirely. Currently, 44 million taxpayers, or one third of all taxpayers, across the country take the state and local tax deduction.
Under the Republican plan, the loss of the state and local deduction would decrease the value of the average itemized deductions by more than half, far below the doubled standard deduction. Families would be left with choosing between a decreased itemized deduction or the doubled standard deduction and no personal exemptions. For many, especially in high SALT states like New York, this would mean a large tax increase. This tax increase would effectively be used to pay for tax breaks for the wealthy.
"Every member of our Congressional delegation must do everything they can to stop this devastating proposal."
The elimination of these deductions would be detrimental to middle-class families in New York, particularly those in the Capital Region. In the Capital Region alone, 165,000 people, or 31 percent of taxpayers, will pay $3,088 more in federal taxes, on average. Across New York, the deduction loss would total about $68 billion per year—that's $68 billion dollars that state residents will no longer be allowed to deduct from their federal tax returns.
Governor Cuomo and Senator Schumer visited the home of Kathleen and Anthony DiSpirito in Bethlehem. Anthony is the Director of Pharmacy for Albany Medical Center, and Kathleen is a stay-at-home mom for the couple's two young boys. They were joined by Abbe Herzig, homeowner from West Sand Lake, Rensselaer County. Abbe is a Statistician for 3M Health Technologies in Albany, and is a single mom of twin 17-year olds, one of whom is in college. Also attending was Linda Seeman, a homeowner from Milton, Saratoga County. Linda is a part time childbirth educator at Ellis Hospital and Albany Medical Center. She and her husband Joe have three grown children and one remaining 17-year-old son at home.
Governor Cuomo and Senator Schumer were also joined by Duncan MacKenzie, CEO of the NYS Association of Realtors Sam Fresina, President of the NYS Professional Firefighters Association, Assemblymember Pat Fahy, Senator Neil Breslin, and City of Albany Firefighters Bob Megel and Ed Verhoff, as well as Albany County Executive Dan McCoy and Bethlehem Town Supervisor John Clarkson.
Duncan MacKenzie, the State Association of Realtors CEO said, "Home ownership is a keystone to strong societies, a keystone to building personal wealth. Anything to take away from that that's irrational, which this really seems to be, doesn't make any sense. We support efforts to reform the federal tax code to create a more simplified and fair system, but eliminating the deduction of state and local taxes, including property taxes, will only serve to hurt New Yorkers disproportionately compared to other states."