Cuomo warns federal budget could turn tax savings into tax increases - 04/17/13
Governor Andrew Cuomo is warning New Yorkers a provision of the federal budget could reverse what is now a savings into a tax increase.
According to the governor's office the proposal to cap or even rid itemized deductions would cost New Yorkers almost $15 billion if approved. Currently taxpayers are allowed to itemize many deductions on their federal return but those deductions are in question during federal budget negotiations, an aid to the governor said.
Director of State Operations, Howard Glaser, said the over three million New Yorkers are affected by the possible change. The most common deduction, now in limbo, is the state and local property tax, Glaser said.
"That is $15 billion of a tax increase to New York State taxpayers, " Glaser said. "That is the taxable amount you would have to pay in addition if you no longer have those deductions."
The governor's office estimates the average New Yorker would see a $4,500 increase, 30%, if the deductions were repealed. The extra revenue the federal government would receive is projected at $70 billion, Glaser added. The figure includes added taxes from a handful of the most highest taxed states like New York.
"I understand the political benefit of it because it raises a lot of money," said Governor Cuomo. "But it's unconscionable as a policy and as a tactic."
I asked an administration official, Wednesday, if the governor will be going to Washington to lobby against the proposals and I was told "that is being discussed."
Congressman Paul Tonko, D- Amsterdam, said Wednesday, there is no secret the federal deficit needs to be addressed but he believes shedding the deductions is not the way to do it.
"I think you will hear a lot of concern expressed certainly by the New York delegation but other delegations," said Tonko.