New York Gov. Andrew Cuomo and his Democratic Counterparts in California and New Jersey are exploring the option of going to Court to fight the Republican Tax Overhaul Plan, specifically, the GOP's desire to greatly reduce the Federal Deduction for State and Local Taxes (SALT).
“This is double taxation and I’m not even sure it’s legal, and we’re going to find out whether it is,” Cuomo said during a telephone conference with California Gov. Jerry Brown and New Jersey Governor-Elect Phil Murphy. “We will tear up all the floorboards, going to the fullest extent of the law to the highest levels and challenge this," Murphy said. “I’m betting there are some holes and flaws in this.”
Cuomo and Brown had spoken together about the Tax Plan in an earlier Phone Conference.
Under the New Tax Plan, if your Deductions are over $12,000 for Individual or $24,000 if married, the Federal Income Tax Deductibility: State and Local Taxes and Deductions of Property Taxes would be Capped at $10,000 Annually, while Mortgage Interest on New Homes would be Capped at Valuation of up to $750,000. Current Mortgages cap is $1,000,000.
In the case of taxable years beginning after December 31, 2017, and beginning before January 1, 2026, a taxpayer may treat no more than $750,000 as acquisition indebtedness ($375,000 in the case of married taxpayers filing separately). In the case of acquisition indebtedness incurred before December 15, 2017 this limitation is $1,000,000 ($500,000 in the case of married taxpayers filing separately). For taxable years beginning after December 31, 2025, a taxpayer may treat up to $1,000,000 ($500,000 in the case of married taxpayers filing separately) of indebtedness as acquisition indebtedness, regardless of when the indebtedness was incurred.
While that change won't have much impact in many States, New York, California, and New Jersey are among those States that have a relatively Higher proportion of Residents living in very Expensive Homes. “In our states, many people pay over $10,000 in property taxes, and those people are out of luck,” said Cuomo.
Murphy added that approximately a Quarter of the Homeowners in New Jersey pay more than $10,000 in Annual Property Taxes.
Cuomo predicted the $1.4 Trillion addition to the Federal Deficit would cause Congress to look at Cutting Social Programs in 2018 for the Poor like Medicaid. “Step one is tax cuts for the rich; step two is drive up the debt, drive up the deficit and then come and say, ‘Ooo, we have a $1.4 trillion debt!’”
Senate Minority Leader Chuck Schumer echoed those sentiments. “The bill will cause one of the greatest transfers of wealth to Corporate America and the already wealthy, while working America picks up the tab," Schumer said in a statement. “Millions of middle-class families will pay higher taxes under the Republican plan in only a few short years. Because the bill is unpaid for, the deficit will skyrocket."
NYC Wins When Everyone Can Vote! Michael H. Drucker
