TODAY'S PAPER
39° Good Evening
39° Good Evening
NewsNation

Tom Suozzi, Peter King push bill to reduce tax hikes under federal SALT tax law

Reps. Thomas Suozzi, left, and Peter King are

Reps. Thomas Suozzi, left, and Peter King are co-sponsoring legislation to phase out the cap on federal deductions for state and local taxes. Credit: Barry Sloan

Rep. Thomas Suozzi (D-Glen Cove) is leading a new effort to ease the federal income tax increase on those who live in high-salary, high-tax areas such as Long Island.

Announced Tuesday, the bipartisan bill co-sponsored by Rep. Peter King (R-Seaford) and Rep. Kathleen Rice (D-Garden City) is aimed at the federal tax bill adopted by Republican President Donald Trump and the GOP-controlled House and Senate in 2017. That federal law gave tax cuts to corporations and to most middle-class families in moderate-cost areas, including the South and Midwest.

To pay for the cuts, the law capped how much taxpayers could deduct on their federal income tax returns for state and local taxes — often referred to as SALT.

Trump’s legislation capped the deduction allowed for state income and local property taxes at $10,000, which resulted in many residents on Long Island, Westchester, Manhattan, New Jersey and many other northeastern and predominantly Democratic states paying more in federal taxes.

Suozzi’s bill would be phased in. It would increase the cap to $20,000 for couples filing jointly for the 2019 tax year. Under the bill, full deductibility for state and local taxes on federal income tax forms would be restored in the 2020 tax year.

To replace the lost revenue, Suozzi said the bill would return the top individual income tax rate to 39.6%, which was cut to 37% under Trump's tax law.

“The SALT cap was particularly unfair to Long Islanders and New Yorkers,” Suozzi said. 

“This is about fairness,” Suozzi said in an interview. “It’s unfair that people are taxed on the taxes they already paid. I have people calling me on the phone, crying … this is affecting hardworking, everyday people.”

 Suozzi said more than 250,000 families in his district had an average state and local tax obligation of $18,300.

"Eliminating deductions for local and state taxes will have a devastating effect on New York,” King said. “We give far more to Washington then we get back. For every dollar we give, we get $.79 back. That’s a $48 billion shortfall and hurts our middle-class Long Islanders. This legislation is critical.”

Although House control flipped to Democrats in 2018, the Senate remains controlled by Republicans who supported Trump’s tax law and have opposed changes to it.

Even if the measure passed both houses of Congress, it could face a veto by Trump.

 A previous attempt by Gov. Andrew M. Cuomo and the State Legislature to undo the impact of the federal tax law on New Yorkers with high wages and high property taxes was rejected by the Internal Revenue Service. In June, Cuomo said the state would continue to pursue "all options including litigation" to change the federal law.

Comments

We're revamping our Comments section. Learn more and share your input.

News Photos and Videos