Long Islanders need their federal deductions for state and local taxes, unlimited until they were capped at $10,000 last year, restored. The draconian cap was instituted by Washington to help pay for huge tax reductions on top earners and a cut in the corporate tax rate far larger than it should have been. Now the cap threatens the budgets of middle-class families, property values and a housing market already losing steam because of rising interest rates.
Long Island Reps. Peter King and Thomas Suozzi introduced bipartisan legislation last week that would restore the full SALT deduction. Introducing it was the easy part. Getting it through the House Ways and Means Committee that Suozzi just joined, and even the full, now-Democrat-controlled House, is possible. What will be difficult is moving it through the GOP-controlled Senate.
According to the Institute on Taxation and Policy, a nonpartisan think tank, a full restoration of federal deductions for state and local property taxes would cost the Treasury $86 billion in 2019. There’s no way such an expensive change, particularly since it’s perceived as helping primarily more affluent and mostly blue states, can be paid for and pass the Senate.
But there’s a way to do it.
Of that $86 billion that would be returned to those who itemize such deductions with a lifting of the cap, it’s estimated $56 billion would go to the top 1 percent of earners, taxpayers making more than $615,000 a year. These are taxpayers who benefitted mightily from the corporate and income tax rate cuts in the 2017 law.
Instead of an unlimited deduction, increasing the cap to $30,000 or $40,000 a year would grant needed relief to families on Long Island and across the country who need it most. And it would be much easier to find the $30 billion to offset it somewhere else.
Chuck Schumer, the Senate minority leader and New Yorker who has been outspoken in fighting the cap, must take this cause under his wing and find something his GOP counterparts want to trade off for what his constituents need. — The editorial board