Taxing Tuesday: SALT cap battles - the New York Republicans make their play
Including my representative Mike Lawler
My representative to the U.S. Congress is Mike Lawler, who was the guy who booted out Sean Patrick Maloney.
For a variety of reasons, he’s in a tenuous position. One is that the NY state Democrats are pretty much going to be given a do-over on redistricting in this state, so the 11 Republicans we currently have in the House of Representatives… yeah, after the 2024 election, we probably won’t have 11, unless all sorts of things happen.
Many of the Republicans who managed to get in, and who will be endangered by this redistricting, are in the NYC suburbs - the highly-taxed areas of Westchester County and Long Island (Suffolk & Nassau counties).
They wrote a letter to the Wall Street Journal:
WSJ, 14 Aug 2023: New York Republicans Respond on SALT Cap
We were surprised to read your editorial “Republicans Return to the SALT Mines” (Aug. 4) questioning our stance on the state and local tax-deduction law (SALT) that has been crippling hardworking, middle-class families in New York for the past six years.
The 2017 law, which limits state and local tax write-offs to $10,000 in federal tax filings and doubled the standard deduction, clearly benefits taxpayers in some parts of the country. But it has proved devastating to countless New Yorkers. Many of them have since voted with their feet, abandoning New York for states with friendlier tax climates.
Blame for New York’s punishingly high taxes and reckless spending, as you point out, clearly rests with the Democrats in Albany who control all three branches of government. We encourage fiscally responsible state lawmakers—or those with simple common sense—to dramatically lower tax rates here and cut state spending.
Meanwhile, it is our duty as members of Congress to defend the pocketbooks of our constituents. In our districts, a cop married to a teacher is considered rich by national standards, but not here in New York.
They shouldn’t be penalized by the federal government with a form of double taxation, especially since New York continues to be a donor state, paying more in federal taxes than it receives from Washington. The idea that other states are subsidizing New York is hogwash.
The SALT deduction, as it now exists, cannot stand. We will continue to fight for responsible changes that help all New Yorkers.
Rep. Mike Lawler (R., N.Y.)
Rep. Nick LaLota (R., N.Y.)
Rep. Andrew Garbarino (R., N.Y.)
Rep. Anthony D’Esposito (R., N.Y.)
Rep. Marc Molinaro (R., N.Y.)
I am one of Lawler’s constituents, and I live in the hamlet of Croton Falls, which is in the town of North Salem.
Meep stays with SALT CAP ZERO
As long-time readers of STUMP know, I want the SALT cap to be zero. I consider that the only equitable choice, and in the long run would benefit people like me, by creating a disincentive to ever-higher taxes at the town, county, and state levels.
To quote myself from February 2019:
Guess what, gov — You can fix this problem right now by lowering the state and local tax burden in New York!
I don’t see why you’re bitching at the rest of the country that New York taxes are so high. It’s not the rest of the country’s fault.
I don’t see why New Yorkers should pay less in federal taxes just because state and local government are profligate.
SALT CAP ZERO! SALT CAP ZERO!
(No, this is not a popular opinion in New York or Connecticut. I’m not about popular opinions anywhere, but especially not in New York.)
However, Mike Lawler and crew are in the U.S. House of Representatives, not in the county executive (currently), nor in Albany.
Stem the tide
I thought the other letter to the editor on the page was amusing:
Perhaps people in the lower-taxed regions should consider subsidizing the high taxes of the progressive states a reasonable investment to reduce the flow of voters from those areas to their states.
Tim Schefter
Loveland, Colo.
Pithy.
It’s a vicious cycle, especially as much of our spending is for debt servicing.
New York Hangover
I did mention last week - who will bail out Chicago?
Well, who will bail out New York?
In Truth in Accounting’s last State of the States report, New York came in number 42.
That’s just looking at the state’s debts.
New York City is in an even worse situation, according to their State of the Cities report, sitting dead last:
By the way, TIA, to reduce confusion, you may wish to use an Albany picture for NY in the State of the States report to reduce confusion. They’ve got some really distinctive art and architecture in Empire Plaza.
Here’s a picture I took when I went for my 44th birthday (for a They Might Be Giants concert, which was held in the pictured building, called The Egg. Yes, it’s ugly. And distinctive.)
But I do need to revisit the state and NYC debt issue because there are some undiscovered problems here. I noticed that this page goes up only until the end of 2020, and I would like to see if that can be extended further. I don’t like that TFA growth.
Debt is only a part of the mix of why this area is high tax. Obviously there is a huge spending problem here.
Lawler’s Message
Lifting the SALT cap is crucial to tackling the affordability crisis we are all facing, and something I have made a top legislative priority of mine from day one. That's why the first bill I introduced in Congress was H.R. 339, the SALT Marriage Penalty Elimination Act. This legislation would double the SALT deduction cap for married filers, eliminating an unfair tax penalty that currently halves the deduction for married filers. I subsequently joined Congresswoman Mikie Sherrill (D-NJ) in introducing H.R. 680, the Tax Relief for Middle Class Families Act, which will increase the SALT cap from $10,000 to $100,000. I also joined several of my New York colleagues on another bill led by Andrew Garbarino to eliminate the cap entirely. That bill was H.R. 2555, the Securing Access to Lower Taxes by ensuring (SALT) Deductibility Act.
I'm proud to serve on the bipartisan SALT Caucus, where I am continuing to work with colleagues on both sides of the aisle to secure the SALT relief Hudson Valley families need. My colleagues who joined me on today's op-ed serve alongside me in the SALT Caucus and I have been working with them on the above bills and many other SALT relief measures.
Representing Their Districts
As I did when I covered Democrats bringing this up two years ago from high-tax districts, let’s check the stats.
I’m in NY District 17 and the Census gives me this distribution for household income:
So what’s cool is I can grab stats for all 5 of the signatories of the WSJ letter:
Only Marc Molinaro is the odd man out in this group — but he’s essentially Southern Tier/Catskills. It’s a poorer, rural area than the 4 suburban districts where it’s mainly populated by professionals like me.
Those little bars at the bottom are “sparklines” - mini-graphs to show how tilted toward the over-$200K income households the 4 suburban districts are.
I’ve had to explain to the kids that yeah, while we’re “poor” for our town (I’ve yet to crack the $200K ceiling), we’re pretty rich for most of the U.S. … and we are above the average in the district.
No, It’s Not Going Anywhere
The thing is, the House is absurd.
And let’s not talk about the Old Folks Home that is the Senate.
I’m fine with what the NY Republicans are attempting — they’ve got to try something — but I really don’t see that the power dynamics are such that they’re going to get much of anywhere.
The high-tax Democrats weren’t able to get anything unstuck.
I don’t see them being able to get anything unstuck.
Best wishes, though.