The GOP’s plan to eliminate the federal deduction for state and local taxes could cost New Yorkers $72 billion a year.
ALBANY — The GOP’s plan to eliminate the federal deduction for state and local taxes could cost New Yorkers $72 billion a year, state controller Thomas DiNapoli warned Thursday.
DiNapoli said the President Trump-backed tax plan could result in higher tax bills for many New Yorkers while giving only modest savings to others.
« New Yorkers lose valuable deductions under the proposed changes to the federal tax code,” DiNapoli said in his report.
Manhattan taxpayers would be the hardest hit, losing an average deduction of $60,384, according to the controller’s report. Westchester and Nassau County residents would lose average deductions of $34,345 and $23,586, respectively.
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« Washington should proceed with caution, because these and other changes have far-reaching implications that not only hit the bottom line for taxpayers, but could affect state and local finances in ways that are hard to predict,” DiNapoli said.
The report was released as the House of Representatives narrowly approved a budget resolution that includes removal of the so-called SALT deductions.
Adoption of the resolution allows Congress to proceed with tax reform legislation through the reconciliation process, meaning a simple majority is all that is needed for passage in the Senate.
Supporters of the GOP bill argue removing the SALT deductions would pay for tax cuts in other areas and that taxpayers would benefit from a doubling of the standard deduction and other potential changes.
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DiNapoli’s estimate of the total impact for eliminating the SALT deductions — which is based on 2015 tax filings — is about $4 billion higher than the figure cited by Gov. Cuomo and Sen. Chuck Schumer earlier this week, and is likely to increase the pressure on GOP members of Congress from New York.
Schumer and Cuomo on Monday urged all members of the state’s congressional delegation to oppose any tax plan that removes the deduction.
Assembly Speaker Carl Heastie (D-Bronx) also sent a letter to House Speaker Paul Ryan warning that the GOP tax plan “would have a significant and unfair economic impact on middle-income families in New York. »
Some House Republicans from New York, including Rep. Peter King, of Long Island, and Rep. John Faso, of Columbia County, have already expressed opposition to removing the tax.
Other GOP members, including Rep. Dan Donovan, of Staten Island, have expressed concern about removing the deduction but stopped short of opposing any tax bill that includes its removal.
