NEW YORK CITY—Two New York members of Congress have introduced bipartisan legislation to restore the state and local tax deduction that was capped at $10,000 as part of the federal tax reform plan passed last month.
US Reps. Nita Lowey (D-NY-17/Rockland-Westchester) and Peter King (R-NY-2/Nassau-Suffolk) have introduced the “SALT Deductibility Act” that would repeal the $10,000 limit on the SALT deduction. The federal tax reform law caps the SALT deduction at $10,000. Many state and local politicians, including Gov. Andrew Cuomo, have railed over the SALT cap, charging that the cap penalizes states with high property taxes such as New York.
Both Reps. Lowey and King voted against the federal tax reform bill— the “Tax Cut and Jobs Act.”
Prior to the enactment of the new federal tax law, taxpayers who itemized could deduct their state and local property and income taxes with no cap. Rep. Lowey notes that 35% of taxpayers in New York State deduct an average of more than $22,000 every year. In Congresswoman Lowey’s district, the 17th Congressional District of New York, the rate is even higher, with 45% of taxpayers relying on the state and local tax deduction at an average of $26,000.
“Millions of taxpayers in high-taxed states like New York depend on the state and local tax deduction to help pay their expenses and care for their families,” said Rep. Lowey. “By effectively eliminating this deduction, the new federal tax law unfairly punishes families living in states that send more money to the federal government than we get back in federal investments. This is unacceptable, and our bill is a necessary step to providing tax relief—not more burdens—for New York families.”
Republican Congressman King says in a prepared statement, “Losing so much of the deduction for state income tax and local property taxes will hurt many New Yorkers. We must keep up the fight.”
Gov. Cuomo, who has vowed that New York State will sue the federal government over the tax reform law, issued a statement in support of the SALT Deductibility Act, noting that New York is the number one donor state to the federal government, sending to Washington, DC $48 billion each year more than it gets back. The cap on the SALT deduction “devastates New York more than any other state and costs New Yorkers an additional $14 billion.”
He adds, “I often say that we are Democrats and we are Republicans, but we are New Yorkers first. Today Representatives Nita Lowey and Peter King came together in a bipartisan fashion and introduced legislation to fully restore the deductibility of state and local taxes. These members are doing what they were elected to do—protect New Yorkers. They showed that New York won’t take this assault sitting down, and I will continue to do everything possible to right this economic injustice.”