salt

Press release:

Today, U.S Senate Majority Leader Charles Schumer and U.S. Senator Kirsten Gillibrand introduced legislation in the new Congress to eliminate the $10,000 cap on the State and Local Tax (SALT) deduction starting in 2021.

The proposal would allow taxpayers to fully deduct their state and local taxes on their federal income returns. In 2017, the deduction was capped at $10,000 and resulted in a tax increase for many middle-class families.

“When it comes to SALT, New York families needed and deserved this money before the coronavirus took hold, the stakes are even higher now because the cap is costing this community tens-of-thousands of dollars they could be using amid the crisis,” Senator Schumer said.

“That is why I am proud to be leading this legislation to restore our full SALT deduction. Double taxing hardworking homeowners is plainly unfair; We need to bring our federal dollars back home to the to cushion the blow this virus—and this harmful SALT cap—has dealt so many homeowners and families locally.

“I am proud to join my colleagues to introduce legislation to repeal the cap on the State and Local Tax deduction, a cynical policy passed by Republicans as a way to repay wealthy donors and lobbyists with big corporate tax cuts,” Senator Gillibrand said.

“The reinstating of the SALT Deduction will ensure that New York families have more money in their pockets, get much-needed tax relief and will once again be treated fairly.”

Schumer and Gillibrand pointed to the following reasons for why the SALT deduction is unfair to New Yorkers:

• New Yorkers already subsidize other states by paying $36-45 billion more in taxes than we receive back from the federal government;
• The repeal of the SALT deduction results in double taxation by imposing federal taxes on the income used to pay state and local taxes;
• The elimination of the deduction drives wealthier people to other states and leaves middle- and lower-income taxpayers holding the bag to pay for school, police and other essential state and local tax burdens.

A breakdown of data from 2017 shows just how critical the full deduction was to New York homeowners. In the 27th Congressional District, for example, 33 percent of taxpayers used the SALT deduction that year, and the average deduction was for $14,096. In Genesee County, a total of 6,840 households claimed the SALT deduction and the average deduction amounted to $10,156. Countywide, 94 percent middle-income taxpayers were beneficiaries of the SALT deduction.

Across Upstate New York, the average SALT deduction was more than $13,000 across more than 1.2 million households.

Under the pre-Trump tax code, taxpayers who itemized deductions on their federal income tax returns could deduct state and local real estate and personal property taxes, as well as either income taxes or general sales taxes.

State and local income and real estate taxes had made up approximately 60 percent of local and state tax deductions, while sales tax and personal property taxes made up the remainder. According to the Tax Policy Center, approximately one-third of tax filers had itemized deductions on their federal income tax returns.

Press release:

The IRS issued new rules that would undermine a critical tax deduction on which New York homeowners rely. This prompted U.S. Senator Charles Schemer to move forward with an effort to restore New York State’s ability to work-around the part of the federal tax law that takes an unfair aim at the state by eliminating a homeowners’ SALT tax deduction.

(SALT stands for State And Local Taxes.)

Loss of the SALT tax deduction will cost New York homeowners tens-of-thousands of dollars.

For example, in Genesee County in 2016, the average SALT deduction amounted to $9,800 and about 6,700 local homeowners took advantage of it, according to statistics compiled by the National Association of Counties.

Schumer says that just as New York State was tying the bow on its work-around plan by passing a law that circumvented the feds, the IRS swooped in and used regulations to squash everything, adding insult to injury for local homeowners.

Therefore, Schumer today (Oct. 22) announced that he will use the Congressional Review Act (CRA) tool to force a vote on the Senate floor this week, on a resolution to nullify recent IRS rules blocking critical state workarounds to harmful state and local tax (SALT) deduction caps, and that restores New York’s ability to work around the harmful caps, allowing homeowners to again fully retain their SALT deduction.

While the IRS blocked New York’s work-around for families, the Treasury Department in September 2018 issued guidance that allowed businesses to continue to benefit from these same work-arounds. Reversing the IRS’s harmful rule will also preserve the ability of states to maintain their own local charitable deductions for education, childcare and nonprofits serving children, rural hospitals, environmental conservation, and more.

“As if the Trump-Republican tax bill — which has spiked tax payments for countless New York homeowners by eliminating the SALT deduction—wasn’t already bad enough, these new IRS rules add insult to injury. They are rubbing salt in the New York homeowners’ SALT-inflicted wounds,” Schumer said.

“Taking away the SALT deduction was brutally unfair to Upstate homeowners and hit ‘em right between the eyes and that’s why later this week, I plan to take control of the Senate floor and force a vote to nullify the IRS’s horrible rule and put power back in the hands of Upstate New York homeowners to soften the blow of the elimination of SALT deductions.

"New York’s hard-working homeowners shouldn’t be forced to bear the burden of the political games that target and punish specific regions of the nation.”

Schumer explained that he can use the special legislative power, provided for under the Congressional Review Act, in an attempt to nullify the recent IRS decision that blocks New York State from working around the provision in the federal tax law that strips New York homeowners from claiming their full SALT tax deduction.

The disapproval resolution under the CRA gives Congress the power to expeditiously review any new federal regulation, like the recent IRS decision that hurts Upstate New York, so long as the CRA disapproval resolution is filed within 60 legislative days of the regulation being finalized. Schumer said the use of the CRA power is comparable to declaring a policy emergency, and when it comes to the SALT deduction in New York State, the issue is serious.

The CRA legislative review is not held to the 60-vote requirement to pass the Senate, Schumer added, making it an attractive plan in this anti-New York era. Schumer reiterated just how serious the SALT issue is across Upstate New York, pointing out county-by-county the average SALT deduction taken by homeowners.

Under the pre-Trump tax code, taxpayers who itemized deductions on their federal income tax returns could deduct state and local real estate and personal property taxes, as well as either income taxes or general sales taxes.

State and local income and real estate taxes had made up approximately sixty percent of local and state tax deductions while sales tax and personal property taxes made up the remainder. According to the Tax Policy Center, approximately one-third of tax filers had itemized deductions on their federal income tax returns.

Schumer has traveled from one corner of the state to the other to push back against the capping of SALT deductions. In 2018, Schumer urged the IRS to grant New Yorkers who paid their 2018 taxes early the ability to apply those taxes to their 2017 SALT deduction, even if their property taxes were not assessed.

As the administration was seeking to pass its tax plan, which capped New Yorkers' SALT deductions, Schumer campaigned against the destructive legislation...calling on the New York Congressional Delegation to reject the misguided plan.

Reporter Scott DeSmit has a pair of interesting articles on the front page of today's Daily News. In one, DeSmit writes about how many municipalities saved themselves some considerable money by locking in their price for this year's road salt at last year's figures. That move will keep them immune, at least for now, from the 30-percent increase in the price per ton.

In the town of Batavia, that move saved them nearly $12,000. They've got 1,300 tons of the stuff packed in their barn.

It's a great article. Worth a full read.

In his front page piece for today, DeSmit writes about an odd state of affairs in Le Roy, where it turns out that ten parks in the village—some more than 100 years old—have never been "properly designated" as parks. "When is a park not a park?" DeSmit quips. "When it's in the village of Le Roy."

Now, the village will have to pass a law to say that yes, in fact, the parks are parks.

This farce is worth more than a laugh. In fact, it's a great example of the ubiquity of legislation in our lives. Without this law, those parks remain a sort of no-man's land where "regulations and restrictions on park use" cannot be "properly" enforced, and the town can't yet do anything to make sure people obey the rules, "rules such as being in the park after hours." Although, as DeSmit admits, this glitch has never prevented those rules from being enforced in actuality. Only now, once the law is passed, it will be official. Funny stuff.

We encourage you to pick up a copy of the Daily News at your local newsstand. Or, better yet, subscribe at BataviaNews.com.