Governor Andrew M. Cuomo today announced that he will propose legislation to further decouple New York State's tax code from the federal code if President Trump moves forward with a plan for a $100 billion capital gains tax cut, ensuring New York does not follow suit in this reckless giveaway to the rich. The Governor also called on Congress to immediately block any attempt by President Trump to unilaterally cut taxes for the nation's wealthiest 1 percent in violation of the Constitution.
"After running on a scam platform of fighting for the middle-class, President Trump is again firing a missile at the heart of our working and middle-class New Yorkers," Governor Cuomo said. "I call on Congress to block any illegal attempt by President Trump to enrich his friends at the expense of the American people. If the President moves forward with his $100 billion tax cut for the rich, I will propose legislation to decouple our state's tax code and ensure New York remains true to its values as a progressive beacon for the world."
"President Trump is looking to hurt middle-class New Yorkers to benefit the wealthiest 1 percent in the nation," said Lieutenant Governor Kathy Hochul. "The Governor and I are calling on Congress to reject any action by the Trump administration that is a direct attack on our state and our residents. We filed a lawsuit against the SALT deduction and enacted legislation to curb the harmful effects of these actions. We will not stop fighting to protect taxpayers from the policies that threaten to roll back our progress."
President Trump recently asked the U.S. Department of Treasury to look into unilaterally slashing capital gains taxes by adjusting the levy for inflation, which would lead to approximately $100 billion in tax cuts over the next ten years. The cuts would disproportionately benefit the richest 1 percent nationally, with 80 percent of the proposed tax cuts benefitting the wealthiest 1 percent in New York and 90 percent benefiting the top 5 percent. The State Department of Tax and Finance estimates that this proposal would reduce state tax revenues by up to $500 million annually, absent state legislation.
After running on a scam platform of fighting for the middle-class, President Trump is again firing a missile at the heart of our working and middle-class New Yorkers.
Currently, because of the way the state tax code's definition of capital gains is coupled with the federal tax code, New York would automatically also adjust capital gains for inflation—delivering an additional tax cut to the top 1 percent on the backs of New York's middle class. Decoupling the state definition of capital gains from the federal tax code will ensure that, regardless of any windfall President Trump's $100 billion tax cut might give to the richest corporations and CEOs, they won't receive the same in terms of state taxes.
Protecting New York Taxpayers
The call for Congress to take action against President Trump's abuse of executive power builds on Governor Cuomo's efforts to protect New York taxpayers since Trump took office.
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, 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 Attorney General Underwood 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.