Now is the Time for SALT Reform
There is a very crucial issue upon which ALL New Yorkers should be able to agree. Whether you are Republican or Democrat, it should be clear to ALL that New York State taxpayers continue to get shortchanged by the Federal Government and by other states.
Since the Trump Administration ended SALT (a Federal income tax deduction for State and local taxes) and because the Biden Administration has not reinstated it, I have continued to be an outspoken critic of all who oppose the reinstatement of the SALT deduction. Not only have I spoken about it, but I have written about it and have even asked our elected officials to demand its restoration.
To date, this restoration of the SALT deduction has not been implemented. The present makeup of Congress includes New York State – and other similarly interested states – which have the representatives and votes that can affect the final outcome of budget or debt ceiling negotiations to require that the SALT deduction is restored as part of any final agreement.
Once again, now is the time to make this happen and restore the SALT deduction.
Both liberals and conservatives have come up with phony reasons to oppose this SALT deduction. The “left” says SALT is a tax break for wealthy millionaires and billionaires. However, the record disproves that. When one combines school taxes, property taxes, mortgage payments and interest payments – especially in an inflation period – and limits the total deduction to what it is today ($10,000) the real impact is not on millionaires and billionaires who can weather the loss of the deduction, but on middle class homeowners and workers. There are very few areas in New York where, after adding up school taxes, property taxes, mortgage and interest payments, the total would amount to only $10,000.
Conservatives are wrong, as well, because they have put forth a false choice. They argue that restoring the SALT deduction is just an excuse to justify high state and local taxes. Personally, I believe state and local taxes are too high, but that has nothing to do with the fairness of reinstating SALT. We can have the best of both worlds: Lower taxes and the reinstatement of the SALT deduction.
The original reason for the SALT limitation was, essentially, to soak more money out of New York taxpayers in order to pay for lower corporate, individual, and other tax rates – or to use that money for additional revenue to spend outside of New York (for other states) in the Federal budget.
The elimination of the SALT deductions were and continues to be unfair to New York State taxpayers. Why? Because New York State continues to send more money to Washington than that which we get back from the Federal Government. And New Yorkers send more money to Washington than do most of those taxpayers from other states. In other words, we pay more to the Federal Government than do other states, but we get less back from the Federal Government than many other states do. With our now-open borders and the exorbitant costs pertaining to the current migrant issue, New York taxpayers are shouldering an even more disproportionate burden in paying federal costs than those from other states. New York City Mayor Adams is right when he says the federal government is not paying their share.
Recent surveys have shown that New Yorkers are leaving the state in droves. A study last week said New York recently lost 5% of its population. Some of that loss is directly tied to the elimination of the SALT deductions.
With the ongoing budget and debt ceiling negotiations, along with the fact that the Trump tax cuts, including ending the elimination of the SALT deduction, are expiring, there is NO EXCUSE as to why any New York elected official should not push either to restore the SALT deduction or to significantly raise its cap from $10.000.
To their credit, New York House Congressional Republicans recently rallied to this issue. Similarly, Congressional Democrats such as former Congressman Tom Suozzi have been in the forefront of reinstating the SALT deduction. The fact that top Democratic leadership in both the Senate and House happen to be New Yorkers should lead to a united front in order to push this through. Those elected officials who do not believe in restoring the SALT deduction should be put on the record as to why they favor taxpayers in other states over their own. This should not be a partisan issue, but, rather, a “New York” issue. Similarly, neighboring states such as New Jersey and Connecticut are currently facing the same issues. Together, we can work to restore fairness and SALT.
Randy Levine is President of the New York Yankees. This is his opinion and his opinion alone; it does not reflect the opinion of any organization he is associated with.
