Schumer’s tax cap fight fails

Senator Charles Schumer’s attempt to quash the Republican cap on state and local tax deductions, or SALT, failed. Sydney Schaefer/Watertown Daily Times

U.S. Sen. Charles E. Schumer, D-N.Y., obviously wasn’t happy with a vote Wednesday to reverse one particular policy.

The 2017 Tax Cuts and Jobs Act placed a cap on how big a federal deduction people could take on their state and local taxes. The rule limited the deduction to the first $10,000, which New York officials knew would hit wealthier taxpayers.

New York joined Connecticut, Maryland and New Jersey in suing the federal government over this restriction on the SALT deduction. Gov. Andrew M. Cuomo lashed out at this legislation, which forced New Yorkers to finally confront the excessively high taxes imposed upon them by the state.

“The federal government is hell-bent on using New York as a piggy bank to pay for corporate tax cuts and I will not stand for it,” he said when the lawsuit was filed.

The state’s lawsuit actually declared that the deduction cap was “an unconstitutional assault on states’ sovereign choices.” Apparently, Mr. Cuomo convinced himself that the federal government has a legal obligation to absorb the out-of-control spending in Albany.

Well, it doesn’t. On Sept. 30, U.S. District Judge J. Paul Oetken in Manhattan dismissed the multi-state lawsuit.

State legislators tried to bypass the federal law. But the IRS got in the way.

“In June, New York attempted to circumvent the cap with legislation that allowed local governments to set up charitable reserve funds that would give tax credits equal to 95 percent of a contribution,” according to a story published Friday by the Watertown Daily Times. “However, the IRS then issued regulations that block governments from giving tax credits for charitable contributions.”

Last week, Mr. Schumer tried to have the IRS policy quashed. He used the Congressional Review Act to compel a vote on the Senate floor.

This measure failed by a vote of 52-43. The minority leader in the Senate also chose to blame Washington for New York’s addiction to taxes.

“The IRS’s harmful rule is just part of a cynical political game that needlessly hurts state tax credits in virtually every state impacting charitable contributions, education, home school, and many other areas,” Mr. Schumer said in a statement Wednesday, according to a story published Friday by the Watertown Daily Times. “Taking away the SALT deduction was brutally unfair to New York’s hardworking homeowners who bear the brunt of the Trump tax bill.”

It’s become obvious that the federal tax cuts passed in late 2017 have not paid for themselves like proponents had claimed they would. The budget deficit exceeded $1 trillion this year — so Albany isn’t alone in its obsession with spending.

But Mr. Schumer is mistaken with his claim that the tax burden felt by New Yorkers is due primarily to the tax cuts passed by Congress. He attempted to conceal the fact that, once again, we live in the state with the highest tax burden.

According to World Population Review, state and local taxes cost New Yorkers 12.97 percent of their income for 2019. Hawaii came in second at a total tax burden of 11.71 percent, and Maine took third place at 10.84 percent.

Mr. Schumer should use his influence to persuade state lawmakers to see how the tax burden they impose on residents can be reduced. That’s the key to making sure high-income earners don’t look for greener pastures in other states.

But in the meantime, the senator may want to get a medical check-up. A high-SALT diet can push anyone’s blood pressure through the roof.

Johnson Newspapers 7.1

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(1) comment

Airball55

Good article

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