Cuomo: Congress must include SALT cap repeal in future legislation

New York Gov. Andrew Cuomo (D) on Monday urged Congress to include repeal of the state and local tax (SALT) deduction cap in future legislation as House Democrats from the state are pushing to include such a repeal in an infrastructure package.

“Don’t pass another bill until you fully repeal SALT,” Cuomo said during a news conference.

Cuomo’s remarks came as he signed a state budget that raises state taxes for wealthy individuals and lowers taxes for the middle class.

The legislation Cuomo signed Monday raises the top state tax income rate to 10.9 percent for income above $25 million. It also continues phasing in tax cuts for middle-class households that were first enacted in 2016 and provides an income tax credit for certain homeowners with income up to $250,000.

Cuomo said that if the SALT deduction cap is repealed, it would effectively lower the new top state tax rate of 10.9 percent to 6.9 percent, lower than the top rate last year of just under 9 percent.

“If they repeal SALT, which I believe they must, the net effect in New York will be that we didn’t raise taxes on anyone,” he said. “We lowered taxes on everyone.”

Cuomo, who is facing numerous allegations of sexual harassment and misconduct, has been a prominent critic of the $10,000 SALT deduction cap since it was first imposed by former President Trump’s 2017 tax law. He argues that the cap punishes the state.

Last week, most House Democrats from New York threatened to oppose future tax legislation that doesn’t include a repeal of the SALT deduction cap. Cuomo said that lawmakers need to live up to their promises to remove the cap.

“The Congress has passed multiple bills. They all promised to repeal SALT. They have not repealed SALT, and they must,” Cuomo said. “There’s another big federal package being proposed. They must repeal SALT.”

Democrats in Congress are hoping to pass legislation based on President Biden’s infrastructure proposal, and several House Democrats from high-tax states such as New York and New Jersey want a SALT deduction cap repeal to be part of that legislation. But it could be a challenge for Congress to address the SALT deduction in infrastructure legislation since repealing the cap would reduce federal revenue.