Trump budget director: It's New York's fault taxes are so high there

Remigio Civitarese
Novembre 15, 2017

Late last week, Cuomo issued news releases aimed at New York's Republican congressional members who appear to be in favor of the House tax-reform package it hopes to have passed and signed by President Trump by the end of the year.

He explained that the plan would completely do away with state and local tax deductions, which would hurt residents of states like NY where the property tax and state income tax levels are high.

King added that Mulvaney should also honor federalism, which allows New York, South Carolina and all states to tax at the level that their lawmakers think necessary.

The budget director also cast doubt on another argument that Cuomo and other advocates of the current system make: that by withdrawing the deduction, the federal government would, in essence, be taxing state and local tax benefits, which would do far more damage in a high-tax state such as NY.

He noted that Mulvaney recently argued high-tax states should take responsibility for their own high tax rates and stop making taxpayers in lower-tax states subsidize them through a break in the federal tax code.

"The system is not set up so that states get back the same amount of money they put in", Mulvaney said, rejecting the idea of comparing what federal services or benefits a state's taxpayers will get in return for the federal taxes they pay.

"Even with the federal deduction [for state and local taxes], people have been leaving NY - high income folks have left already", he said.

He pointed out that NY sent an estimated $48 billion more in tax payments to Washington in 2016 than it received back in federal spending, which amounts to approximately 79 cents on the dollar.

He added, "It is factually inaccurate to claim NY is being subsidized by low-income states after analyzing both federal tax policy and spending policy". He reiterated that a majority of New Yorkers will enjoy a $1,600 tax cut under the House plan.

Mulvaney, a former congressman from SC, which has lower taxes than NY, also said that "it is simply not fair, it's not right, that the folks who live in the low-tax jurisdictions are actually subsidizing the folks that live in the high-tax jurisdictions". "And I think you could make an argument that that's simply not fair, it's not right. that the folks who live in the low-tax jurisdictions are actually subsidizing the folks who live in the high-tax jurisdictions".

"I've heard the folks say you know it's really double taxation", he said.

"I'm like: 'No, we're only taxing you once".

In conference call to reporters last Thursday, Reed said that in both the House and Senate versions the standard deduction increases from $12,000 to $24,000, meaning a larger number of people won't be itemizing because the standard deduction will surpass any package of deductions filers are now using. The Senate bill would scrap the SALT deductions altogether.

"The governor of New York said this is going to be a tax increase on every single person in New York", Mulvaney said.

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