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Cuomo to meet with Trump to seek end of cap on SALT deductibility

New York Gov. Andrew Cuomo and Robert Mujica,

New York Gov. Andrew Cuomo and Robert Mujica, budget director of the State of New York, on Feb. 11, 2019 in Albany. Credit: AP/Hans Pennink

ALBANY — Gov. Andrew M. Cuomo said he is scheduled to meet with President Donald Trump on Tuesday to press his effort to overhaul Trump’s tax plan, which is driving up federal income taxes for high-income, highly taxed New Yorkers.

Trump’s tax cut package, passed in December 2017, provides a long-term corporate tax break, but helps pay for it by capping the deductibility of state and local taxes, or SALT, on federal income taxes. That is increasing many New Yorkers’ federal income tax bills in areas with high local property taxes and income taxes, such as Long Island, Westchester County and Manhattan.

“To me, there is no more vital, long-term issue for this state than SALT,” Cuomo said.

A week ago, Cuomo blamed the SALT provision and Trump for a $2.3 billion hole in state income tax revenue for December alone. Cuomo said the loss in estimated income tax payments by high-income earners indicates that many top earners may be leaving the state, threatening a long-term loss of revenue. Fiscal analysts, however, have also noted that Wall Street bonuses are down and the economy is slowing.

Last week, Trump said he was open to discussing changes in his tax package. He provided no specifics.

Cuomo said that in his midafternoon meeting with Trump he will press for a full repeal of the SALT provision. He said he has no alternative or compromise to offer, but said Trump would simply have to find another way to fund his corporate tax break.

State Budget Director Robert Mujica said about 1.7 million of New York’s 9 million tax filers in 52 of 62 counties are hurt by the cap on the SALT deduction. He said they will pay an additional $15 billion in federal taxes. But Cuomo said all New Yorkers are hurt because the federal measure is driving wealthy employers and money out of New York State and could force higher state and local taxes or cuts in services.

Cuomo indicated he will argue that the federal tax law is a redistribution of the wealth of richer states — almost all of which are dominated by Democrats — to poorer states, mostly dominated by Republicans. Cuomo said wealth redistribution is a liberal or socialist idea that Trump and Senate Republicans have said they oppose.

“They have done it at the highest level imaginable,” Cuomo said. He noted Democratic-led Massachusetts and California had similar hits from the capping of SALT.

“This changes the economic trajectory of the state,” Cuomo said. “People are mobile and they will go to a better tax situation. That is a fact.”

Cuomo has been highly critical of Trump for months and has said some of his policies were un-American. He has met a few times with the Manhattan developer since his election in 2016. Trump had previously been a large contributor to Cuomo's campaigns. In last week's State of the Union address, Trump criticized New York's more expansive abortion law and Cuomo, who Trump said cheered its passage.

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