King Denounces GOP Budget

“This proposal will devastate my district forever.”

So said Rep. Peter King (R-NY) as the U.S. House of Representatives voted last Thursday to approve a $4.1 trillion budget, a vote that allows the Republican Party-controlled Senate and House to proceed with tax reform legislation.

The bill was approved by a slim 216-212 margin. King was among the 20 Republicans voting “no.” The bill had no support from the Democratic Party caucus.

Opposition from King and other New York Republicans, including Rep. Lee Zeldin (R-Shirley) was based on the elimination of the long-standing deduction of state and local taxes. (SALT). That deduction has been in place since 1913 and for the Republican caucus, it is seen as a vehicle to gain an estimated $1.3 trillion in savings, while that party seeks the first major tax reform legislation in 31 years.

The provision that has caused such consternation among New York lawmakers allows taxpayers who itemize deductions on their federal income tax to deduct certain taxes paid to state and local governments from their gross income for federal income tax liability purposes. According to the Jared Walzack of the Tax Foundation, six states—California, New York, New Jersey, Illinois, Texas, and Pennsylvania—claim more than half of the value of the deduction, with California and New York accounting for a third of the total.

Despite the vote, there is no way yet to predict the fate of the deduction. Rep. Kevin Brady (R-TX), chairman of the Ways and Means Committee, said the formal tax legislation will be unveiled on Nov. 6. Prior to the vote, there was talk of a compromise on the deduction such as capping the deduction for taxpayers with incomes below a certain threshold, such as $250,00 and $400,000, with Tom Reed, a congressman from upstate New York spearheading such talks.

Opposition to the deduction within the GOP comes only from its House caucus.

Earlier in the week, the U.S. House Senate, by a 52-47 vote, rejected an amendment by Sen. Maria Cantwell (D-WA) that would have protected the deduction. There are no Republican Party senators from New York, California, New Jersey and Illinois, and only one from Pennsylvania. Texas has two Republican Party senators.

King and other Republicans from New York and New Jersey have claimed that their constituents rely heavily on the deduction and would face a burdensome tax hike without it.

“While I strongly believe our tax code needs to be reformed and simplified, everything must be done to ensure property tax and state income tax deductions are preserved,” King said in a statement. “No one should be taxed again on money you have already been taxed on at the state level. These tax deductions have been in place since 1913 and have ensured the taxpayer would not be burdened by a double tax. Almost half of my constituents benefit from the SALT tax deduction, and taking away these deductions would be crippling to New Yorkers, especially those on Long Island. A great majority of Long Islanders are homeowners and their home is their main asset, nothing should ever be done to make home ownership more difficult in an already extremely expensive market.”

“After the Senate recently added anti-SALT language to their budget resolution that was not in the earlier passed House version, I decided to vote against [the] budget resolution, because a workable solution has not yet been identified to this issue,” added Zeldin, when the vote passed. “My goal in this tax reform mission is focused on allowing Long Islanders to save more of their paycheck, reduce their cost of living, and put away more money for retirement. We need a fairer, simpler tax code that would allow Americans to fill out their tax return on a postcard. We also need to improve the business climate, by reducing the corporate income tax rate to create more American jobs, to bring jobs and businesses back from overseas, and to prevent other jobs and businesses from leaving.”

At the same time, Zeldin criticized New York state elected officials for the state’s tax burden.

“The state and local elected officials responsible for making our state such a high tax state really need to do their part to reduce the tax burden from their end as well, because it is out of control,” he said. “Our state and local tax deduction with the feds is so high, because our state and local taxes are so high. New Yorkers and all Americans need tax relief from all levels of government. It is my current mission to do my part delivering a tax cut ASAP from Uncle Sam. The last piece of this effort to get this win over the finish line is this important negotiation for major changes to that proposal to eliminate SALT. Americans work hard for their money and I believe very strongly that they should keep more of it to save or spend on whatever their heart’s desire.”

As noted, no Democrats voted for the GOP budget. That included Rep. Thomas R. Suozzi (D-Glen Cove).

“Any New York Republican who votes in favor of the House budget proposal and tax package that still includes the elimination of state and local tax deductions is clearly prioritizing the interests of their party over their constituents,” Suozzi said. “Passing this plan would result in a big tax increase for many middle class families in New York, especially those in my district.”

The deduction is supported by Rep. Paul Ryan (R-WI), the Speaker of the House. In defending the deduction in a recent speech, Ryan, too, criticized the policies of certain states for their current tax and budget situations, while praising other states that Ryan claimed had “cleaned up” their fiscal conditions.

The 20 Republicans who voted “no” included 12 members from New York, New Jersey and Pennsylvania. In addition to King and Zeldin, the other “no” votes from the New York Republican Party delegation included John Faso, John Katko, Elise Stefanik and Claudia Tenney, all of whom represent districts north of Westchester County.

Joe Scotchie
Joe Scotchie is the editor of both The Roslyn News and New Hyde Park Illustrated News. In 2009, he won a New York State Press Association award for a sports feature. Joseph Scotchie’s past publications include biographies of Thomas Wolfe and Richard Weaver and a comprehensive history of the city of Asheville, North Carolina.

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