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New York, California Governors Unite to Save SALT Deduction

Posted on October 30, 2017 by Paige Jones

The Democratic governors of New York and California denounced efforts to repeal of the state and local tax (SALT) deduction under the GOP's federal tax reform bill and slammed local Republican supporters as scared and treasonous.

Although both governors have vocally opposed the Republican tax reform plan and its proposed elimination of the SALT deduction, this is the first time the state leaders from opposite coasts have united to try to save the deduction, which is disproportionately claimed by New York and California filers.

In a joint media call October 27, New York Gov. Andrew Cuomo (D) called the GOP tax reform plan, which has yet to be released in full, a scam. He said the proposed elimination of the SALT deduction “totally violates states’ rights” and is an attempt by U.S. lawmakers to impose their views “on what should be done” in California and New York.

“They’re using a handful of states to finance tax cuts for their states. . . . This is just a pure political power play,” Cuomo told reporters.

Similarly, California Gov. Jerry Brown (D) called the GOP plan a “gross manipulation of our tax code” and a “Hail Mary pass by the Republicans” to pass tax reform.

“It’s a bad, bad bill, and it ought to be voted down, or at least delayed and debated” more, Brown said.

House Republicans said they will unveil their tax reform bill November 1. The tax reform framework that was released September 27 appeared to propose repealing the SALT deduction, but did not include details. House Ways and Means Committee Chair Kevin Brady, R-Texas, said October 25 that his tax reform bill will include an agreement to limit the deduction. Details on the agreement, however, remain unclear.

Both governors also slammed the Republican lawmakers from their states who voted for the Senate budget resolution on October 26. The budget, which was passed by a slim margin, includes reconciliation instructions that will allow Senate GOP lawmakers to approve tax reform legislation without Democrats.

Cuomo said he holds U.S. Reps. Tom Reed and Chris Collins, both New York Republicans, “personally responsible” for paving the way for tax reform legislation that could eliminate the SALT deduction. He called their “aye” votes for the Senate budget resolution “modern-day treason against the state.”

“I think they are the Benedict Arnolds of today,” Cuomo said.

Brown said California's congressional GOP delegation, which voted entirely for the budget resolution, is “doing California a disservice.” He said the members are scared and have “all fallen in line” with Republican leadership, but added that what would really count is if they “stay in line and not vote against the ultimate tax bill.”

Proponents of repealing the SALT deduction have said that it disproportionately benefits high-income earners, specifically those earning over $200,000, and could lead to lower individual income tax rates.