WASHINGTON — Gov. Andrew Cuomo on Sunday called the GOP tax overhaul a “dagger at the economic heart of New York” and predicted dire consequences for New Yorkers from tax hikes to mortgage foreclosures under the plan.
“I wouldn’t be surprised if home values drop, if you saw mortgage foreclosures go up… The economic consequences are going to be a major issue for us going forward,” Cuomo told John Catsimatidis on his 970 AM radio show.
Congress is set to the pass the sweeping tax plan this week so President Trump can sign his first legislative victory by Christmas.
What’s a huge concern for residents of high tax states like New York, California and New Jersey is capping state and local tax deductions to $10,000 and lowering the mortgage interest deduction on new homes from $1 million to $750,000.
“It’s devastating to New York State and 12 other states,” Cuomo said. “What they did here was reprehensible. I call it an economic civil war. They just divided the nation. They’re using 12 states, which happened to be blue states … to finance the tax cut in the other states.”
A 2017 report by the Rockefeller Institute of Government found that 13 states — led by the Democrat states of New York, New Jersey, Illinois, California, Massachusetts and Connecticut — gave much more to the federal government in taxes than they received back in government services. New York shouldered the worst disparity of a $48 billion negative balance.
“They use New York and California and the other Democratic states as a piggy bank… to fund the other states. … It is a dagger at the economic heart of New York,” Cuomo said.
Several New York Republicans have pushed back on the tax plan, including Reps. Peter King, Lee Zeldin and Dan Donovan, who worry their constituents will pay more in taxes with the loss of the full state and local deduction.
“If there was some bipartisanship here, if the Democratic Party was making suggestions and the President didn’t have to depend only on Republican votes, this tax bill may look a lot different,” Donovan (R-S.I.) told Catsimatidis on “The Cats Roundtable” on AM 970 in New York.
But Democrats want to see Trump “fail,” added Donovan, who is undecided, on the final bill.
The tax bill would be big boon to businesses by lowering the corporate tax rates from 35 percent to 21 percent and to wealthy individual earners by lowering the top rate from 39.5 percent to 37 percent and sparing more people from the estate tax. The Trump Administration believes much of middle class would benefit by doubling the standard deduction, increasing the child tax credit and increased economic activity.
“This will be very large tax cuts for working families and very large tax cuts for businesses to make them competitive,” Treasury Secretary Steve Mnuchin told CNN’s “State of the Union.”
Mnuchin acknowledged some New Yorkers will take a hit under the plan because of the elimination of the full state and local tax deduction. But he maintains it will be wealthy people who will pay more.
“In the high-tax states, actually, rich people taxes will be going up,” Mnuchin said.
“There are people who are rich people that are having their taxes going up.”