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Fair Residents react to tax reform
House, Senate both release tax legislation
The House of Representatives tax-reform bill was passed by a 227 to 205 vote on Nov. 16, paving the way for high-tax suburban regions like Long Island to be hit hard as the legislation would limit or eliminate deductions for property taxes, mortgage interest, and state and local taxes, while much of the rest of the country could see at least modest cuts in their federal tax bills, according to elected local leaders.
Long Island Republicans Peter King, of Seaford, and Lee Zeldin, of Shirley, were among the 13 GOP members who voted against the House bill.
U.S. Democratic Rep. Tom Suozzi opposed the House bill, along with all 191 other Democrats. “For those who supported this bill, they are complicit in what will be a devastating tax increase on the middle class,” Suozzi said. “I urge the Senate to reject this legislation and instead work with the House to pass a bipartisan bill that makes sense and protects hard-working middle-class families in New York and across the country.”
Glen Cove resident Stuart Held is also not in favor of the bill. “I think the bill that passed in the House and the Senate bill favor the ultra-rich,” said Held. “The little guy looks like they aren't getting any recognition.” He added that he hopes the Senate bill will not come to fruition so it can be readdressed after negotiation with the House.
The nonpartisan Congressional Budget Office last week released its analysis of tax-reform legislation now under consideration in Congress. According to the CBO, the House plan would add roughly $1.7 trillion to the U.S. debt over 10 years. The Senate plan was still being analyzed at press time.
The decade-long spike in annual deficits would increase the national debt by 6 percent over a decade, after which debt would nearly equal the nation’s gross domestic product, according to a letter to Congress by CBO Director Keith Hall.
Both bills would keep tax exemptions for employer-sponsored health plans and retirement savings accounts, said Howard Gleckman, a senior fellow a the Tax Policy Center at the Urban Institute and Brookings Institution, a Washington, D.C.-based think tank.
The House bill would repeal most of the state and local tax deduction, but retain a limited deduction of $10,000 for property taxes. The Senate bill would scrap the deductions entirely. The House bill would impose new caps on mortgage interest deductions, while the Senate bill would end them. The House bill would end the deduction for medical expenses, while the Senate bill would retain it, Gleckman said.
Both bills would cut corporate income tax rates and tax rates on pass-through businesses, such as partnerships, from 35 percent to as low as 20 percent.
The standard deduction for average tax filers would be doubled, but itemized deductions, such as those for property taxes and mortgage interest, would be limited or eliminated, Gleckman noted.
The tax cuts “would primarily benefit businesses and high-income households,” he said.
Sea Cliff Mayor Edward Lieberman said the New York Conference of Mayors has taken an official position opposing the elimination of tax deductions. “To me it’s another example of prejudice, both financial and otherwise,” he said. “If it’s eliminated it’s going to affect approximately 35 percent of New York state’s population who uses those itemized deductions.”
Lieberman called the proposal an "unfair assault” on local taxpayers. “Hopefully the Senate will amend that aspect of the bill to ensure the elimination doesn’t take place.”
Legislator Delia DeRiggi-Whitton agreed. “I’m not in favor of the House’s proposal, and I hope the Senate votes it down,” she said.
Sea Cliff and Glen Head residents are already feeling the brunt of property tax burden from New York American Water — a decision by the Public Service Commission earlier this year forced the company to include its property taxes in ratepayers’ bills.
“It’s another aspect of an undue interference on residents,” Lieberman said “They will be double taxed on top of all the other charges that we are receiving in addition to the high water bills.”
Alex Gallego, Oyster Bay Chamber of Commerce president and senior vice president of investments at Raymond James said a tax reform is needed, but the proposed reform could go either way being either beneficial or hurtful to Oyster Bay residents.
“It is important to note that the detailed framework still needs to be translated to legislation, and details of the final legislation could differ significantly from the framework,” Gallego added.
The two tax plans will be debated and modified in the coming weeks, before a unified bill can be agreed on and sent to President Trump’s desk for signing. Trump made tax reform, in particular simplifying the tax code, a centerpiece of his 2016 campaign and is banking on passing legislation this year to bolster his declining poll numbers, according to a number of pundits.
