New York Gov. Andrew Cuomo (D) said Monday that he is planning to meet with President Trump on Tuesday afternoon to discuss a provision in Republicans’ 2017 tax-cut law, arguing that the provision is harmful to the state.
Cuomo and other governors in high-tax states have been highly critical of the tax law’s $10,000 cap on the state and local tax (SALT) deduction.
“There is no more vital long-term issue for the state from a financial point of view than SALT,” Cuomo said at a news conference Monday. “What [the cap] does, is it has created two different tax structures in this country. And it has created a preferential tax structure in Republican states.”
{mosads}The meeting comes after Cuomo earlier this month said that personal income tax receipts declined in the state in December and January, and he attributed that decline to the cap on the SALT deduction.
It also comes after President Trump last week told a group of reporters that he is open to revisiting the cap on the deduction. However, a spokesman for Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said that the panel wouldn’t revisit the deduction cap this year, indicating that changes to the limit on the deduction are highly unlikely to be enacted in the next two years.
Republicans capped the SALT deduction in their 2017 law at $10,000, arguing that doing so will stop the federal tax code from subsidizing higher state taxes. The cap was also designed as a way to raise revenue to offset the cost of tax cuts elsewhere in the legislation.
But the cap has been strongly opposed by lawmakers on both sides of the aisle from states such as New York, New Jersey and California, who are worried that the cap will hurt their constituents.
Sen. Bob Menendez (D-N.J.) and Rep. Bill Pascrell (D-N.J.) on Monday introduced a bill to restore the full state and local tax (SALT) deduction. The bill would also raise the top individual income tax rate from 37 percent to 39.6 percent — which was the top rate before the 2017 tax law was enacted.
“Allowing property taxes to be fully deducted has been a bedrock principle of our tax code and is commonsense tax policy that rewards states that invest in things like education, public safety, infrastructure and economic opportunity for all,” Menendez said in a statement.
The legislation is co-sponsored by Rep. Chris Smith (R-N.J.) — one of a small number of House Republicans who voted against the tax bill — and a number of Democrats from high-tax states, including Senate Minority Leader Chuck Schumer (D-N.Y.) and Sens. Cory Booker (D-N.J.) and Kirsten Gillibrand (D-N.Y.), who are both running for president.
Updated at 5:26 p.m.