The tax plan unveiled by Republicans in the House of Representatives will disproportionately raise taxes on those living in Northeast states like New York, New Jersey and Connecticut. Many lawmakers from the region, including Republicans, are against the plan.
For high tax states with high housing costs, the GOP plan is sobering. It would eliminate deductions for state and local income taxes while also capping property deductions.
For example, New Yorkers making $75,000 to $100,000 will have to pay taxes on $10,000 more in income. Most of them will see their tax bracket drop from 15 percent to 12 percent. But for households making between $90,000 and 153,000 a year, their tax bracket will remain the same, meaning an overall higher tax bill. Connecticut, Massachusetts and Rhode Island have lower income taxes so the change will be less drastic, but still a net negative.
Congressional Republicans, including Peter King, Dan Donovan, Tom MacArthur and others have signaled they will oppose the bill. Speaking on Fox Business News on Thursday, Long Island Representative Lee Zeldin explained: “Those rich New Yorkers are subsidizing the rest of the country. New York is subsidizing the rest of the country, both in tax policy and spending policy.”
Democrats in the region go further and call the tax plan a scam and a redistribution of wealth from politically liberal states to conservative states. Herman Berliner, a professor of economics at Hofstra University, said, “A redistribution is not the term I would use. But it is certainly very unequal benefits, with the benefits being far greater for residents of other states.”
Also, under the new GOP plan, property tax deductions would be capped at $10,000 and mortgage tax deductions over $500,000. This would hit downstate New York and New Jersey the most where housing is expensive. For example, in Nassau County the average tax bill is $12,000, meaning they will have to pay taxes on that extra $2,000.
Copyright 2017 WSHU
