Trump tax cut plan could lead to tax increase for some New Yorkers
President Donald Trump’s tax cut plan is so far just a one-page outline, but it’s already raising some red flags for New York’s political leaders.
The plan would slash corporate taxes and nearly double the standard deduction for married couples to $24,000.
But the proposal also would eliminate the practice of deducting state income taxes and local property taxes from federal income taxes, and that could harm taxpayers in states with high local taxes, like New York.
Gov. Andrew Cuomo has been worried about the potential change for a while.
“This would actually be a dramatic, dramatic increase,” Cuomo said on March 23. “And in effect, probably the largest single tax increase in the state’s history.”
Cuomo said losing the ability to deduct the state and local taxes could even “expedite” wealthier New Yorkers leaving the state.
John Flanagan, the leader of the state Senate Republicans, said in a statement that while he supports the idea of tax cuts, he has “grave concerns” about eliminating the state and local tax deductions.
And even some Republican members of Congress from New York are having qualms. Claudia Tenney, a conservative-leaning Republican who represents parts of central New York, said until the state overhauls its own tax codes, New Yorkers “cannot afford” to lose their itemized deductions because the benefit offers state residents one of their few forms of tax relief.
Deductions for mortgage interest and charitable donations would still be allowed under Trump’s proposal.
Even if the Trump tax plan advances in the House, it still faces some powerful opposition in the Senate.
Sen. Chuck Schumer (D-NY), the Democratic minority leader, said ending the deductions could cost an average New York household $4,500 a year in additional taxes.
“I have never seen a tax plan that does more harm to the middle class and more to boost those at the top than the outline released yesterday,” Schumer said in a news conference on April 27.
Schumer said he’s not going to let that happen.