Components of the Tax Cuts and Jobs Act, a federal tax reform bill passed by the House of Representatives in November and currently before the U.S. Senate, has achieved the seemingly impossible in finding common ground for Republicans and Democrats.
Members of Long Island’s congressional delegation from both political parties stood in front of the Internal Revenue Service building in Hauppauge Nov. 28 alongside business owners, representatives from local chambers of commerce, and town and county elected officials to deliver a clear and unified message: As currently constituted, both the House and Senate versions of the bill would harm Long Islanders.
“I view it as a geographic redistribution of wealth to propose eliminating [state and local tax deductions],” 1st Congressional District U.S. Rep. Lee Zeldin (R-Shirley) said during the press conference, pointing to the elimination of the SALT deduction as a key sticking point in the bill. “You’re proposing to take more money from a place like New York in order to pay for deeper tax cuts elsewhere.”
“You’re proposing to take more money from a place like New York in order to pay for deeper tax cuts elsewhere.”
— Lee Zeldin
The SALT deduction, which was enacted 100 years ago, is a provision that in the past, through federal tax returns, gave a portion of tax dollars back to individuals in higher income and property tax states like New York, New Jersey and California to avoid double taxation. The deduction was eliminated in the House version of the Tax Cuts and Jobs Act, which the body passed Nov. 16, for individuals’ income taxes, and limited property tax deductions to $10,000. The Senate’s version of the bill, which has not been voted on yet, completely eliminates all SALT deductions. Both the House and Senate versions double the (married filing jointly) standard deduction from $12,000 to $24,000. The bill has been touted by President Donald Trump (R) and other members of Republican leadership as a massive tax cut for middle-class families.
The 2nd District U.S. Rep. Peter King (R-Seaford) and 3rd District U.S. Rep. Tom Suozzi (D-Glen Cove) also attended the press conference to rally support for changes to the bill. Zeldin and King were among 13 Republicans in the House to vote “no” on the bill, with 227 voting to pass it. None of the House Democrats voted in favor of the bill.
“There are some good aspects in both the House bill and the Senate bill,” Zeldin said. “Voters last November, when they went to the polls looking for that tax relief for them, for their families, for their community … this is not the tax relief that they had in mind. We may be upsetting a lot of people in our own party back in Washington right now, but we are not elected to be their congressmen.”
King echoed Zeldin’s position on both versions of the bill, calling the position between the three representatives a “united front.”
“I strongly favor tax cuts across the board,” King said. “I believe they are necessary, but this bill, both the House version and the Senate bill, I am opposed to.”
“We’re not asking for any special benefit, because we’ve gotten a raw deal over the years as far as federal distribution of revenues, but don’t add to that.”
— Peter King
King reiterated that his biggest issue with the bills is the elimination of the SALT deduction.
“This is inequitable, it’s unjust and it’s wrong,” King said. “Long Island is really the main victim of this tax bill. We’re not asking for any special benefit, because we’ve gotten a raw deal over the years as far as federal distribution of revenues, but don’t add to that. Don’t make it worse.”
King, who has been a supporter of Trump and his agenda, also took the opportunity to send a message to the White House.
“My district twice voted for Barack Obama by four points and by five points,” King said. “Donald Trump carried [New York’s 2nd Congressional District] by nine points. That was a 14-point turnaround. The people of Long Island didn’t make that turnaround so the Trump administration could raise their taxes so the rest of the country could get a tax break.”
Suozzi, the lone congressional Democrat at the event, also preached unity on tax reform as it pertains to Long Islanders.
“This would be a punch in the gut to everybody on Long Island if this bill were to pass either in the House form or the Senate form,” he said. Suozzi added that he thought it took guts for Zeldin and King to be among the 13 “no” votes among Republicans in the House. “We’re united 100 percent in recognizing eliminating the state and local tax deduction would be devastating to our constituents.”
New York’s income tax rate is among the highest in America, with members of the top tax bracket paying 8.82 percent in 2017. On average, the state income tax deduction for New Yorkers making between $50,000 and $200,000 in annual income for the 2015 tax year was between $4,049 and $9,330. The same group of earners deducted on average between $5,869 and $8,158 over the same time period in state and local real estate taxes. The 2015 tax year is latest year with available data according to the Urban-Brookings Tax Policy Center, an organization that provides independent analysis of tax policy.
Representatives from local organizations stood outside Renaissance Technologies in East Setauket Nov. 29 to voice their opposition to the bill. Until recently, Robert Mercer was the chief executive officer of the hedge fund, though he is known nationally for his contributions to conservative and right-wing political campaigns.
“It’s clear that there are a lot of changes that are coming and for middle-class folks like us, they’re not going to be good changes,” said Peter Verdon a Suffolk County resident who was present at the protest. “The system is clearly out of whack, tilted towards the extremely wealthy and it’s continuing in that direction and enough’s enough. We can’t allow that to continue to happen.”
Bill Crump, a Lindenhurst resident and member of the Long Island Progressive Coalition political activist group also attended.
“We’re going to have a $1.5 trillion deficit and they’re going to cut our Medicare and our benefits,” he said. “It’s coming out of our pockets. Trump claims he’s going to give a tax cut. Maybe he’s going to give you a quarter while he reaches in and takes your wallet.”
This post was updated Nov. 29 to correct the income tax and mortgage tax deduction amounts under the two bills, and to include information about a Nov. 29 protest in Setauket. Additional reporting contributed by Kevin Redding.