To the Editors:
President Donald Trump’s plan to overhaul the federal tax code would scrap the popular federal income tax deduction for state and local taxes—and taxpayers in high-tax states, particularly states like New York, New Jersey and California, are likely the biggest losers.
Trump’s proposal to remove the state and local tax (SALT) deduction is unfair for a few reasons:
New Yorkers already pay more than their fair share in federal taxes–New Yorkers already pay $19B more annually in taxes than NYS receives back in federal spending.
Eliminating federal deductibility for state and local taxes would amount to double taxation, as these taxes are mandatory payments for all taxpayers.
Millions of American taxpayers and policymakers have acted in reliance on the state and local tax deduction, which has been part of the tax code since the income tax was established in 1913. Eliminating the SALT deduction pulls the rug out from under them.
Taxpayers should not be punished for funding state and local governments that go above and beyond what an increasingly stalemated federal government is doing. NY’s state and local taxes fund public schools, tuition free state colleges and innovative environmental and energy conservation programs that fill the gaps in federal policy.
Rather than targeting a tax deduction for the middle class (87% of those claiming the SALT deduction earned less than $200K annually), real tax reform would focus on the 27 companies in the S&P 500 that reported paying no income tax despite reporting pre-tax profits, according to a 2016 USA TODAY analysis.
That’s why I am proud that Croton’s Board of Trustees voted on a unanimous and bipartisan basis for a resolution in support of preserving the federal tax deduction for state and local taxes at the request and suggestion of the NY Conference of Mayors. By passing this resolution, we join a nationwide grassroots movements of local governments big and small fighting for fair tax policy.