February 22, 2019
Albany, NY

Governor Cuomo Announces States Join Campaign to Fight for Tax Fairness

TOP Governor Cuomo Announces States Join Campaign...

New York, Connecticut, Hawaii, Illinois, New Jersey, Oregon, Rhode Island and Washington Call on Congress to Restore Full SALT Deductibility and Stop Disproportionate Economic Attack on Predominantly Democratic States

 

Governors to Work with Congress to Fight Back

 

The 12 States Most Impacted Make Up 40 Percent of the National GDP

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Governor Andrew M. Cuomo today announced Connecticut, Hawaii, Illinois, New Jersey, Oregon, Rhode Island and Washington joined New York's nationwide campaign to fight for tax fairness. Governor Cuomo launched the campaign following his meeting with President Trump on the devastating impact of the elimination of full state and local tax deductibility, which disproportionately impacted New York and other predominantly Democratic states. New York has observed a decline by $2.3 billion in estimated payments of Personal Income Tax receipts in December and January. New York's revenue loss is consistent with results for the same period in similarly situated states.

 

 

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To fight back against this economic assault, the Governors of impacted states are working with their Congressional Delegations and Speaker Pelosi to immediately reestablish full SALT deductibility and restore fairness for millions of hard-working American taxpayers.

 

"The President gave an unseemly tax cut to corporations and the rich and he financed it by raising taxes on primarily democratic states through the elimination of SALT," Governor Cuomo said. "New York has been fighting this economic assault for over a year and together with these partner states who are also affected by the loss of the SALT deduction, we will not rest until Congress ends this punitive policy once and for all."

 

 
 

"New York has been fighting this economic assault for over a year and together with these partner states who are also affected by the loss of the SALT deduction, we will not rest until Congress ends this punitive policy once and for all."

Governor Andrew M. Cuomo

"The disastrous federal tax law has become what we always expected: a windfall for the wealthy and a tax hike for millions of working and middle-class families," said New Jersey Governor Murphy. "In New Jersey, we have been working tirelessly to provide long-term tax relief for our residents and have challenged this law in court to restore tax fairness. I look forward to working with Governor Cuomo, the rest of our sister states coalition, and New Jersey's congressional delegation to continue the fight to fully restore the SALT deduction and stop President Trump's politically-motivated attack on blue states."

 

Connecticut Governor Ned Lamont said, "This bill was sold as a tax-cut, but in reality it's a tax hike for millions of middle class Americans. The cap on the state and local tax deduction intentionally hits states like Connecticut particularly hard. That's why we're joining with other states to work with lawmakers in Congress to repeal this provision."

 

Illinois Governor J.B. Pritzker said, "Two million Illinoisans, which is nearly one-third of all Illinois taxpayers, used the SALT deduction. And 85 percent of those who claim SALT make less than $200,000 a year. A cap on the SALT Tax deduction directly hurts states like Illinois and with this legislation adding trillions to the deficit, handing billions to corporations, and forcing middle class communities in all of our states to foot the bill, it's time for Congress to reverse this law."

 

Washington Governor Jay Inslee said, "We shouldn't have one set of rules for some Americans and another set for the rest. Our tax laws shouldn't be written based on which states ended up in the 'blue' and 'red' columns in the last election.  Congress should restore full SALT deductibility to provide economic fairness for the tens of thousands of Washington families who are disproportionally harmed by this law."

 

According to the Government Finance Officers Association, the top 12 states with the highest average deduction for state and local taxes - a majority of which are democratic - include New York, New Jersey, Connecticut, Rhode Island, Oregon, and Illinois. Those 12 states make up a combined 40 percent of the national GDP. Other impacted states in the coalition, like Hawaii and Washington, add to that total.

  

While Republicans in Congress have supported legislation to re-open the Tax Cuts and Jobs Act to address mistakes in the original law, they have failed to address the primary issue with the bill - the arbitrary $10,000 cap on SALT deductibility. 

 

The Office of Senator Chuck Grassley of Iowa, Chairman of the Senate Finance Committee, recently announced they do not plan to revisit the SALT deductions because it's "a federal subsidy for states to raise taxes on their residents without political consequence." The SALT Deduction is not a "federal subsidy," rather it is a fundamental recognition of state sovereignty. In fact, the federal government subsidizes Senator Grassley's home state of Iowa $3.5 billion - while New York already pays the federal government $36 billion more than we get back, even before the elimination of the full SALT deduction. Only ten states pay more to the federal government than they receive.

 

According to an analysis by Steven Rattner, former Counselor to the Secretary of the Treasury, the tax law has disproportionately hurt democratic states, including a negative impact on home prices. In addition, the tax bill appears to be having an impact on the tax refunds many Americans have come to rely on. The IRS has reported the average tax refund as of the second week of filing season was $1,949, down 8.7 percent from the year earlier, and that the total number of refunds is down 16 percent.

 

Under Governor Cuomo's leadership, New York was the first state to take action to protect residents from the federal administration's elimination of full state and local tax deductibility. In April 2018, the Governor signed legislation to provide new options for charitable contributions and create a new Employer Compensation Expense Program that allows employers to help their employees preserve deductibility of wage income. 
  
Governor Cuomo and the New York Attorney General also filed a lawsuit to protect New York and its taxpayers from Washington's drastic curtailment of the state and local tax deduction. The lawsuit, which was filed in July, argues that the new SALT cap was enacted to target New York and similarly situated states, that it interferes with states' rights to make their own fiscal decisions, and that it will disproportionately harm taxpayers in these states.


In February 2018, Governor Cuomo launched the Tax Fairness for New York Campaign to combat the anticipated impacts of the federal tax law. As part of this campaign, the Governor launched a website to inform New Yorkers of the State's efforts to fight the tax law, including the lawsuit against the federal government, a repeal of the law, and an overhaul of the tax code.

Governor Cuomo Announces States Join Campaign for Fight for Tax Fairness

According to the Government Finance Officers Association, the top 12 states with the highest average deduction for state and local taxes - a majority of which are democratic - include New York, New Jersey, Connecticut, Rhode Island, Oregon, and Illinois. Those 12 states make up a combined 40 percent of the national GDP. Other impacted states in the coalition, like Hawaii and Washington, add to that total.

  

While Republicans in Congress have supported legislation to re-open the Tax Cuts and Jobs Act to address mistakes in the original law, they have failed to address the primary issue with the bill - the arbitrary $10,000 cap on SALT deductibility. 

 

The Office of Senator Chuck Grassley of Iowa, Chairman of the Senate Finance Committee, recently announced they do not plan to revisit the SALT deductions because it's "a federal subsidy for states to raise taxes on their residents without political consequence." The SALT Deduction is not a "federal subsidy," rather it is a fundamental recognition of state sovereignty. In fact, the federal government subsidizes Senator Grassley's home state of Iowa $3.5 billion - while New York already pays the federal government $36 billion more than we get back, even before the elimination of the full SALT deduction. Only ten states pay more to the federal government than they receive.

 

According to an analysis by Steven Rattner, former Counselor to the Secretary of the Treasury, the tax law has disproportionately hurt democratic states, including a negative impact on home prices. In addition, the tax bill appears to be having an impact on the tax refunds many Americans have come to rely on. The IRS has reported the average tax refund as of the second week of filing season was $1,949, down 8.7 percent from the year earlier, and that the total number of refunds is down 16 percent.

 

Under Governor Cuomo's leadership, New York was the first state to take action to protect residents from the federal administration's elimination of full state and local tax deductibility. In April 2018, the Governor signed legislation to provide new options for charitable contributions and create a new Employer Compensation Expense Program that allows employers to help their employees preserve deductibility of wage income. 
  
Governor Cuomo and the New York Attorney General also filed a lawsuit to protect New York and its taxpayers from Washington's drastic curtailment of the state and local tax deduction. The lawsuit, which was filed in July, argues that the new SALT cap was enacted to target New York and similarly situated states, that it interferes with states' rights to make their own fiscal decisions, and that it will disproportionately harm taxpayers in these states.


In February 2018, Governor Cuomo launched the Tax Fairness for New York Campaign to combat the anticipated impacts of the federal tax law. As part of this campaign, the Governor launched a website to inform New Yorkers of the State's efforts to fight the tax law, including the lawsuit against the federal government, a repeal of the law, and an overhaul of the tax code.

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