Governor Cuomo: "The GOP also purports to oppose policies of "redistribution." The dirty little secret is that President Trump and the federal government are the true redistributors of wealth. The new federal tax law is the ultimate income distribution—not from rich to poor, but from blue states to red states."
The Wall Street Journal published a version of Governor Andrew M. Cuomo's response to former Florida governor, now Senator, Rick Scott's op-ed in support of the SALT tax cap. The governor's full response is available below.
There's a scene in the West Wing, a classic TV series about life in the White House, in which the fictional President Josiah Bartlet debates the governor of Florida. When the governor begins the debate with typical conservative talking points against proactive government, President Bartlet responds with a question: "Your state of Florida got $12.6 billion in federal money last year — from Nebraskans, and Virginians, and New Yorkers, and Alaskans. Can we have it back, please?"
When I read the former Governor and current Senator from Florida attack New York in these pages last week, I couldn't help but wonder at how life imitates art. The Senator's piece argues in support of the 2017 tax reform's unprecedented cap on state and local tax (SALT) deductibility. This change has profound economic significance, representing a tax increase of more than $600 billion nationally, with dire implications for New York. Specifically, the Senator claims that the cap "stops high-tax states from burdening the rest of us with their irresponsible decisions."
I have strongly opposed the new cap on SALT deductibility, and I would like to offer the Senator some facts.
New York doesn't add to Florida's bills - we pay them. In 2017, Florida took nearly $46 billion more from the federal government than it contributed - making it the #2 "grantee" state in the nation. By contrast, just ten states out of fifty are "donor" states, contributing more to the federal government than they receive. New York is the #1 "donor" state in the nation: in 2017, we gave the federal government $36 billion more than we got back. The curtailment of SALT deductibility takes this gross imbalance and supercharges it, costing New Yorkers another $14 billion each year.
It's not just New York. The five states most hurt by the SALT provision—New York, Connecticut, New Jersey, California, and Massachusetts—give $86 billion more to the federal government than we get back every year. How can Republicans deny that raising taxes on these states will hurt the nation? Republicans are biting the hands that feed them and attacking the country's core engines of economic growth.
But SALT was never about economics. It was about politics. The law was passed by a Republican President, a Republican House, and a Republican Senate. Its explicit purpose was to weaponize the federal tax system against predominantly Democratic states: President Trump and Republican governors have trumpeted the law as an effort to cause business and individuals to migrate to Republican states. In fact, the twelve states most hurt by the limitations on deductibility all voted against President Trump in 2016.
The hypocrisy is breathtaking. Even as these Republicans attack the progressive model of government, they have betrayed the very principles they themselves claim to hold dear. The GOP is, after all, supposed to be the party of federalism and "states' rights." And since the Civil War, when President Lincoln signed the first federal income tax into law, the federal government has explicitly recognized state and local governments' right to tax their own jurisdictions. But this new federal law imposes a tax on state and local taxes - the first double tax in history, hampering states' ability to make their own fiscal decisions.
The GOP also purports to oppose policies of "redistribution." The dirty little secret is that President Trump and the federal government are the true redistributors of wealth. The new federal tax law is the ultimate income distribution—not from rich to poor, but from blue states to red states. If the Republicans were to follow their own doctrine, they would at least allow each state to keep its own wealth rather than transferring it. If the "grantee" states were not subsidized by the federal government, they would have to raise their own state and local taxes.
Under my administration, New York has made historic strides in fiscal discipline: Eight timely budgets after decades of dysfunction in Albany. A 2% cap on state spending growth. The lowest middle class tax rate since 1947. The lowest corporate tax rate since 1968. The lowest manufacturers tax rate since 1917. Today, every New Yorker pays a lower tax rate than when I took office. We have capped property tax growth at 2%, a provision that has saved New Yorkers $25 billion. We have added over a million private sector jobs, all while making historic investments in infrastructure, health care, and education.
The federal SALT cap threatens to derail this remarkable progress. But I'll offer the Senator from Florida the Bartlet deal: If he wants to return to New York the $36 billion that we give to Florida every year, I'll end my campaign to reinstate SALT deductibility. Until then, I would encourage the Senator to focus on the pressing issues facing our nation. Climate change - which threatens the long-term viability of his own state - might be a good place to start.