Following the release of President Trump’s tax plan, U.S. Senator Charles Schumer today (April 30) pushed to preserve very popular and essential, but, nevertheless, at-risk tax deductions New York homeowners and taxpayers depend upon to keep the high cost of living in-check.
Schumer explained that New York homeowners are in tax jeopardy as President Trump’s new tax plan proposes eliminating state and local property tax deductions.
“Taking away or even reducing the state and local tax deductions would be brutally unfair and hit New York homeowners right between the eyes, said U.S. Senator Charles Schumer. “This is the wrong thing to do if we are serious about helping to build and expand the middle class. Under President Trump’s plan, the top rate would come down, taxes that disproportionately affect the very wealthy would go away, while middle-class and working families would be denied some of the most frequently-used deductions: the state and local tax deduction. I will use my clout in the Senate to fight all efforts that would roll back the state and local property tax deductions.”
Schumer said that eliminating this deduction will hurt middle-class and working-class New York residents the most out of any other state.
He said that removing of these tax deductions would hit New Yorkers particularly hard, given the high local cost of owning a home. Schumer pledged to fight any efforts that would rollback critical savings deductions used by New York homeowners and taxpayers.
“President Trump’s plan includes massive tax cuts for the very wealthy, and crumbs – at best – for everyone else,” Schumer added.
Treasury Secretary Mnuchin confirmed that President Trump’s just-released tax plan proposes an elimination of the state and local tax deduction.
Under the current federal tax system, taxpayers who itemize deductions on their federal income tax returns can deduct state and local real estate and personal property taxes.
State and local income and real estate taxes make up approximately sixty percent of local and state tax deductions while sales tax and personal property taxes make up the remainder.
According to the Tax Policy Center, approximately one-third of tax filers itemize deductions on their federal income tax returns.
Schumer said that the elimination of these deductions would be detrimental to middle-class families in New York.
As was cited by New York State, the loss of the deduction would cost New York City residents an average of $5,500 per year for those who file itemized returns. And across New York, the deduction loss would total about $68 billion per year, or an average tax increase of $4,500 per New Yorker who itemizes – that’s $68 billion that state residents will no longer be allowed to deduct from their federal tax returns.