Lowey, Local Officials, and Realtors Decry Impact of SALT Deduction Cap to House Ways & Means Committee
Capping the SALT deduction was an assault on the middle class
that targeted New York taxpayers
Lowey bill would fully restore the SALT deduction
White Plains, NY – Congresswoman Nita Lowey (D-NY17/Rockland-Westchester), Chairwoman of the House Appropriations Committee; Westchester County Executive George Latimer; Town of North Castle Supervisor Michael Schiliro; and the Hudson Gateway Association of Realtors (HGAR) submitted written testimony to the U.S. House of Representatives Committee on Ways and Means on behalf of the New Yorkers who have been overburdened by the Republican tax law that placed a cap on the state and local tax (SALT) deduction.
“Simply put, the cap on SALT deductions is an insult to New York’s residents and businesses that send more revenue to the federal government than our state receives back in federal support,” said Congresswoman Lowey. “Specifically, the Tax Cuts and Jobs Act (TCJA)’s cap unfairly burdens Westchester and Rockland taxpayers, who in 2017 ranked numbers one and two for highest average property taxes in the country. Seventeen months after enactment, the TCJA is not paying for itself, as many Republicans promised, and it is not boosting the economy. Outside of these disturbing but not surprising developments, taxpayers in states like New York are struggling to manage serious ramifications from the $10,000 cap on the SALT deduction.”
Prior to enactment of the Republican tax law, New York taxpayers who itemized could deduct their state and local property and income taxes. The SALT deduction was a major source of tax fairness for high-taxed states like New York, where 35 percent of taxpayers deduct an average of more than $22,000 every year. In my Congressional district, which includes all of Rockland and parts of central and northern Westchester, the rate is even higher, with 45 percent of taxpayers relying on the state and local tax deduction at an average of $26,000. The Republican tax law, however, capped the SALT deduction at $10,000, effectively raising taxes on millions of middle-class Americans who depend on the deduction.
“As municipal government and school district leaders work to meet community needs in a fiscally responsible way, we would appreciate the partnership of the federal government, not the imposition of double taxation,” said Westchester County Executive George Latimer. “As the County Executive for Westchester County New York, I want to express my strong opposition to the federal limits on SALT deductions, and my strong support for the repeal of this limitation. In Westchester County, more than 47% of residents itemize their federal tax deductions with an average of $34,300 in deductions, well above both the cap and the new standard deduction. However, federal law now caps the SALT deduction at $10,000. This results in double taxation on the same income, and effectively raises taxes on thousands of middle-class and working families in Westchester who depended on the deduction.”
“The SALT deduction caps have been felt in our community, and time will tell how that will impact future investment and renovations in single family homes,” said North Castle Town Supervisor Michael Schiliro. “There has been continued downward pricing pressure on all segments of the existing housing market, as buyers know that the deductibility of real estate taxes is now extremely limited, if not eliminated.”
“Middle income New Yorkers will bear the brunt of the cap on the state and local income tax deduction,” said HGAR Government Affairs Director Philip Weiden. “Capping SALT along with the scaling back of the mortgage interest deduction will have long term effects on wealth creation in the U.S. and will hurt America’s biggest asset which is their home. This has also hurt New York’s State budget and created new fiscal short falls that the Governor and the Legislature must deal with. This will affect all areas of our state whether they are upstate or down state.”
Congresswoman Lowey has been a leader in the U.S. House for restoring the SALT deduction. In January, Congresswoman Lowey re-introduced a bipartisan bill with Republican New York Congressman Peter King to eliminate the SALT cap once and for all.
Congresswoman Lowey’s full testimony can be found here.
Westchester County Executive George Latimer’s full testimony can be found here.
Hudson Gateway Association of Realtors (HGAR)’s full testimony can be found here.