Eight US states join campaign to fight for tax fairness
Staff Writer |
Governor Andrew M. Cuomo announced Connecticut, Hawaii, Illinois, New Jersey, Oregon, Rhode Island and Washington joined New York's nationwide campaign to fight for tax fairness.
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Governor Cuomo launched the campaign following his meeting with President Trump on the devastating impact of the elimination of full state and local tax deductibility, which disproportionately impacted New York and other predominantly Democratic states.
New York has observed a decline by $2.3 billion in estimated payments of Personal Income Tax receipts in December and January.
New York's revenue loss is consistent with results for the same period in similarly situated states.
"We're here today to talk about basic tax fairness. We have a tax system in this nation and every American expects the same thing, which is fairness," said Governor Cuomo.
"They want to pay their fair share of taxes and they want to receive the benefit in return. The president signed tax reform in December of 2017, as everybody remembers. It was a tax reform bill that, in our opinion, skewed the benefits to the rich and the rich corporations.
"And that was the discussion at the time. But there was a provision in that tax reform bill that very few people took notice of, which is now referred to as SALT, which was ending the deduction of state and local taxes," said Governor Cuomo.
"They did this, in part, to finance the tax cut for the rich. The deduction of SALT raised over $600 billion for them to finance their tax cut.
"What does it mean, the deduction of SALT? It means those states that have state and local taxes, those taxes would no longer be deducted from the federal income tax.
"Which mean, in essence, your state and local taxes will be taxed by the federal government. It hurts, obviously, those states with state and local taxes. This was the first time since the federal income tax was proposed by President Abraham Lincoln that the federal government did this," said Governor Cuomo.
"It is the first tax on taxes in the history of the United States of America.
"And what it does, is it puts those states that have state and local taxes at a structural economic disadvantage.
"Because now, in this mobile economy where people can move and businesses can move and they can shop for better economic conditions, it puts the states with state and local taxes at a significant disadvantage from the other states, compounded by the fact that they just got a tax decrease in that same Tax Reform Act," said Governor Cuomo.
"It has hurt New York State. I can tell you that. We are now seeing our tax returns come in at the beginning of the year.
"Our estimated payments are down 55 percent, which means our state has a $2.3 billion shortfall on the revenues that were predicted.
"Now coincidentally, the states that have state and local taxes tend to be Democratic states. And I'm sure that was a coincidence in the way the bill was actually written. But that coincidence did not go unnoticed," said Governor Cuomo.
"Now, President Trump has said he is open to discussing this SALT provision, which is a gross injustice. It was politically motivated in my opinion. It was declaration of an economic civil war between Democratic states and Republican states. But he said he was open to discussing it.
"Senator Grassley said the exact opposite," said Governor Cuomo.
"By the way, I believe President Trump is now open to discussing it because he now has a Democratic Congress and Speaker Nancy Pelosi and this tax change effects many of the members of her delegation, by definition, and he's going to have to be open to speaking about it because I'm sure it's going to be on top of the Congressional agenda.
"Senator Grassley went the exact opposite way and said he's not open to it because these states, the Democratic states that have SALT deductions that it would be a giveaway to those states with state and local.
"The truth is the exact opposite. Here's a surprising fact, but math still matters even in Washington, D.C. Of the 50 states, 40 states receive money from the federal government. Ten states donate.
"Meaning, when you look at what states pay into the federal government versus what they get back, 40 states get back more than they put in.
"10 states actually contribute more to the federal government than they receive back. New York is the number one donor state at $36 billion.
"We give in $36 billion more than we give back," said Governor Cuomo.
"The state of Iowa, which is represented by Senator Grassley actually receives $3.5 billion more than they put in.
"So, if you're talking about fairness, if you're talking about justice, this added insult to injury.
"These were states that were already contributing more to the federal government and now they receive less and they contribute even more.
"It's ironic that an administration that is so vehemently against the concept of income redistribution, right, we shouldn't take from the rich to give to the poor.
"Well the way they fashioned their tax statement, you have 10 states giving and 40 states receiving. It is the ultimately redistribution and the deduction of SALT just adds insult to injury.
"In some ways, I'm not surprised. Look, this is an administration that has made their tactics clear. It is divide and conquer," said Governor Cuomo.
"They will divide by race, they will divide by sexual orientation, they will divide by immigration status and now through their economic platform they divide by party identification," said Governor Cuomo.
"Where they have the democratic states paying more than the Republican states.
"It's wrong, it's divisive, it's poison for this nation, it is a cancer in the American body politic and it's spreading.
"And this, pardon the pun, adds salt in the wounds, both literally and figuratively. ■