New York Congressional Delegation's Views on Tax Reform

John Jordan | November 2017

ALBANY—The New York State Association of Realtors reports that all Democratic New York Congressional representatives, including local Congressional representatives Sean Patrick Maloney, Nita Lowey and Eliot Engel, have come out against the Tax Cuts and Jobs Act” proposal also known as the GOP tax reform plan released on Nov. 2. Also, New York’s two Democratic U.S. Senators Charles Schumer and Kirsten Gillibrand have come out against the GOP proposal.

Realtors and other real estate and business organizations have come out against the plan. HGAR officials tell Real Estate In-Depth that the GOP tax reform plan would cap the mortgage interest deduction at $500,000 for new mortgages, limit the exemption on capital gains tax from the sale of a primary residence, eliminate the deduction for state and local income or sales taxes, eliminate the Mortgage Interest Deduction for second homes, eliminate the deduction for moving expenses, eliminate the deduction on interest on student loans and eliminate the deduction for medical expenses, even for the elderly.

Among the New York State Republican Congressional delegation, Reps. Peter King (2-Seaford), Lee Zeldin (1-Riverhead-Patchogue) and Dan Donovan (11-Staten Island) sent a letter on Nov. 1 to House leaders offering a tax reform alternative that would retain full property tax deductions, partial deductions for state income taxes and “significant elements of the income tax deduction,” according to a report in Newsday.

NYSAR tells Real Estate In-Depth it believes that Reps. King and Zeldin are against the tax reform plan as proposed. Also, Rep. Donovan, who is the only Republican Congressman representing a district in New York City, is believed to be leaning toward opposing the plan as drafted. He said in a statement, “The tax reform details as presented today will hurt, not help middle class families in New York. We need a bill that doesn’t divide and penalize some Americans just because of their zip code. I plan to negotiate vigorously to protect the state and local tax deduction that has been a part of our tax code since its inception, as well as the full mortgage interest deduction. People are counting on us; we have to get this right.”

Upstate Congressman Tom Reed (23-Corning) and Chris Collins are in favor of the measure, NYSAR stated.

Gov. Andrew Cuomo and U.S. Senator Schumer in a conference call today with reporters criticized the compromise proposed by the New York GOP delegation in its letter sent to the House leadership prior to the rollout of the tax reform plan.

Sen. Schumer said the compromise reduces the cost to New Yorkers, but still takes away 71 cents out of every dollar in tax deductions to state taxpayers. “It’s as if they said, ‘Well in the past we’ll chop off five of your fingers, now we’ll only chop off three or four.’ Aren’t we doing you a big favor?” Sen. Schumer queried.

Gov. Cuomo added, “President Trump said this is a Christmas gift. If it’s a Christmas gift, New York gets a lump of coal from Santa Trump on this one. So it’s bad medicine for the entire country, but it is an arrow pointed at the heart of New York.”

Both Sen. Schumer and Gov. Cuomo criticized U.S. Reps. Collins and Reed for their support for the measure and praised Reps. King, Zeldin and Donovan for their respective stance thus far on the proposal. They also pleaded with those that are on the fence to oppose the measure. Gov. Cuomo advised them, “Don’t vote as a partisan, vote as a New Yorker.”

The remaining four Republican members of the U.S. House continue to express concerns with the initial proposal but have not expressly stated they will vote “no” on the bill in its current form. All have expressed misgivings with the legislation.

Rep. John Faso (19-Kinderhook-Kingston) released a statement a day before the House vote on the legislation that he would vote against the bill. He said, “I have consistently stated that my goals for tax reform are to increase economic growth, increase worker paychecks, incentivize small business investment and ensure New York families are better off. Unfortunately, I do not believe the current tax bill being considered by the House meets all of these goals. As such, I will vote no when the bill is considered in the House of Representatives tomorrow.

“The complete removal of the deduction for state income taxes and the limitation on deductions for local property taxes will impact New York families more severely than taxpayers in other states,” he continued. “While the full SALT income tax deduction for individuals is repealed, full deductibility will remain in effect for corporations and other business entities, thereby protecting taxpayers in states like Texas which rely more heavily on corporate taxes. Since New York taxpayers already send over $40 billion more in tax dollars to Washington than we receive back in federal benefits and services, we are not being subsidized by any state. Frankly, I resent the accusation that New Yorkers are being subsidized by the rest of the nation, when in fact the opposite is true.”

Rep. Elise Stefanik (21-Glens Falls-Plattsburgh) called the release of the Tax Cuts and Jobs Act as a “starting point” for tax reform. “I will be working with my colleagues in the New York delegation to improve this plan to provide real tax relief for New Yorkers and to address the issue of state and local tax deductions,” she stated. “My goal for this process is to make certain that families and businesses in our district receive tax relief. I encourage all of our constituents to read this plan and contact my offices by phone or email to share their feedback.” She added that she is committed to achieving tax reform that makes our tax code fairer and simpler for families and businesses across the North Country.”

Rep. Claudia Tenney (22-Ithaca-Rome) said that tax reform is “key to unleashing our economy, bringing back jobs and renewing the promise of the American Dream for all.” She also said the Tax Cuts and Jobs Act “is an important first step to level the playing field for hardworking Upstate families and end loopholes that only benefit the wealthy and well-connected.”

However, she did say that she would “continue to advocate for robust SALT provisions that provide tangible relief to New York taxpayers, small businesses and family farmers. In a state like New York, where taxpayers are beholden to the unaccountable and fiscally irresponsible policies of liberal elites in Albany, the SALT deduction matters. It amounts to real relief for hardworking families. This is why I continue to stand with many of my Republican colleagues from New York in advocating for the inclusion of meaningful SALT provisions in a final tax reform package.”

Rep. John Katko (24-Syracuse) also described the GOP tax reform plan as a “starting point” for enacting tax reform. “For 30 years, progressives have demanded exactly what this bill does – easing of the tax burden on low and middle income working families and eliminating loopholes,” Rep. Katko stated. “Anyone who dismisses this bill outright should be prepared to explain this discrepancy, and detail why hardworking Americans should continue to be taxed at excessive rates. No bill is perfect, which is why we need to keep this process moving forward. As this measure moves through the House over the coming weeks, I will continue to consult with individuals, families, small businesses and manufacturers across my district and seek their feedback. As I always have, I will advocate in Congress to ensure that this measure is a net win for Central New York. “

Editor’s Note: Government Affairs Director for the Hudson Gateway Association of Realtors Philip Weiden said that HGAR members and affiliates should respond to the Call to Action issued by the National Association of Realtors on the federal tax reform issue.

For Realtors to respond to the NAR Call to Action click on the following link: https://realtorparty.realtoractioncenter.com/site/Advocacy?cmd=display&page=UserAction&id=4976&utm_source=rorg&utm_medium=website&utm_campaign=tax2017&s_src=website&s_subsrc=rorg

Non-Realtors can click on the following link to participate in the Call to Action on tax reform: http://homeownershipmatters.realtor/taxreform/

John Jordan
Editor, Real Estate In-Depth