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What you need to know for 07/26/2017

Cuomo against ending local tax deduction

Cuomo against ending local tax deduction

Ending a longstanding local tax deduction on federal tax returns would cost taxpayers in the Capital

Ending a longstanding local tax deduction on federal tax returns would cost taxpayers in the Capital Region an average of $2,900, according to the state Department of Taxation and Finance.

Gov. Andrew Cuomo spoke out Tuesday against the proposal, which was included in President Barack Obama’s budget proposal.

“The proposals under consideration that would repeal or cap the deduction for state and local taxes would have severe consequences for taxpayers here in New York and across the nation,” he said in a statement. “I urge Congress and the administration to act in the best interests of taxpayers and reject these proposals that would cost New York families thousands of dollars extra each year.”

More than 3 million New Yorkers typically take advantage of this policy, which allows taxpayers to deduct their state and local taxes, including property taxes, from their federal tax bill. The deductions were worth about $57 billion to New Yorkers in 2010, according to state officials.

In the Capital Region, the state estimates more than 170,000 taxpayers utilize this deduction.

U.S. Rep. Bill Owens, D-Plattsburgh, said Congress needs to carefully consider the ramifications of ending this deduction.

“This is a process that needs to move forward with care and thoughtfulness to protect the middle class, and I look forward to a robust, bipartisan debate on how we can best keep taxes low while eliminating unnecessary complexity in the tax code and ensuring fairness,” he said in a statement.

Cuomo noted that the local tax deduction was worth more for New Yorkers in 2010 than the home mortgage interest and individual charitable contributions deductions combined.

E.J. McMahon, director of the fiscally conservative Empire Center of New York, wrote in a blog post Tuesday that a strong case can be made for retaining the deduction. He noted that Obama and the Republicans in Congress have similar views on ending the deduction and predicted they might agree to ending the deductions for wealthy households.

“Both are willing to tightly curtail if not eliminate tax breaks at the top end, of which the state and local tax deduction is among the largest,” McMahon wrote.

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