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King, Suozzi: Outlook grim for state and local tax deduction

Rep. Thomas Suozzi speaks during an executive breakfast

Rep. Thomas Suozzi speaks during an executive breakfast event hosted by the Long Island Association in Melville Friday, Nov. 17, 2017. Credit: Barry Sloan

Reps. Thomas Suozzi (D-Glen Cove) and Peter King (R-Seaford), two opponents to the GOP tax bill that passed the House Thursday, said the Senate is unlikely to restore state and local tax deductions, which could cost Long Islanders $2.5 billion annually.

In a joint appearance Friday in Melville at the Long Island Association, the region’s largest business group, King and Suozzi said while the fight is not over, the outlook is grim.

“It’s been a rough week for New York and for Long Island,” said King, noting that the GOP-led Senate also favors eliminating the deductions. “It’s not over until it’s over. But I’m not too optimistic.”

Nearly 50 percent of taxpayers in King’s district claim the state and local tax deduction.

House Republicans on Thursday passed their version of a sweeping $1.5 trillion tax overhaul by a 227-205 vote. The plan sharply cuts taxes for corporations and small businesses and lowers many individual rates. But the bill eliminates the ability for taxpayers to deduct state and local taxes on federal tax returns, except for property taxes up to $10,000.

The Senate is weighing a similar measure, but that bill would eliminate the state and local tax deduction entirely. It also would eliminate the individual mandate for health insurance.

An LIA study said ending the state and local deductions could cost Nassau and Suffolk taxpayers up to $2.5 billion per year while the state’s Department of Taxation and Finance found that nearly 950,000 Long Islanders would be hurt financially from the change.

Suozzi, a freshman congressman, called the bill “devastating” for Long Island and urged business leaders to mount an opposition as the measure works its way through the Senate.

“There is hope,” he said. “But less and less every day.”

Suozzi’s district has more than 250,000 families that use the state and local tax deduction, the most in the nation.

In an interview last week, Mick Mulvaney, director of the Office of Management and Budget, said “bad decisions” by New York lawmakers were responsible for the state’s high tax rates.

“Is it the federal government’s fault that New York taxes are so high that they’re driving people out of the state?” asked Mulvaney, an ex-South Carolina congressman.

King shot back Friday: “We have people like Mulvaney to blame because New York gets back 79 cents for every dollar we send to Washington.”

A report from the Rockefeller Institute of Government, an Albany think tank, said New York sends $48 billion more to the federal government than it gets back — the highest disparity in the nation.

King said the House bill will “disproportionately” affect the Long Island economy, reducing disposable income and causing many residents to flee the state.

President Donald Trump, meanwhile, is focused on bringing down corporate tax rates and is unlikely to help Long Island, he said. “He wants a win on the board,” King said.

Suozzi said that despite the long odds, “we need to keep fighting. If I go down, I’ll go down kicking and screaming.”

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