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Senate Votes To Protect Taxpayers From $1.5 Billion ‘Hidden’ State Tax Hike

State Senator Patty Ritchie today (Jan. 23) voted for legislation that would block a hidden, $1.5 billion hike in state tax bills affecting nearly every single New York taxpayer as a result of recent changes to the federal tax code.

The measure, S6974-A, co-sponsored by Senator Ritchie, was approved unanimously by the Senate. It would allow New Yorkers to continue to claim tax-saving deductions on their state returns, including allowing full deductions for school and property taxes, medical expenses and charitable contributions.

 

“In the Senate, we’ve worked hard to lower taxes, including enacting the largest-ever income tax cut in state history, in order to help hardworking families and make living in New York more affordable,” Senator Ritchie said. “But much of that relief would be lost if we don’t take this step to protect taxpayers from a hidden tax increase resulting from changes to the federal tax code.”

Because New York’s tax code is “coupled” with federal law, key changes enacted by Congress as a result of the Tax Cuts and Jobs Act will have a direct impact on the way that New Yorkers complete their state tax returns.

For example, more New Yorkers will choose to claim the new, higher standard deduction instead of itemizing individual expenses to reduce their federal tax bill.

Under current law, those taxpayers would not be allowed to itemize their state return, which could result in a higher state tax bill.

The Senate bill “decouples” the tax codes to preserve deductions for state tax purposes.

The Governor’s Executive Budget proposal did not include this step to prevent the automatic tax increase.

“It doesn’t make sense to offer taxpayers a break on their federal taxes, only to take it away on their state returns,” Senator Ritchie said. “That’s why it’s so important that the Assembly follow our lead and pass this common sense bill to protect taxpayers and prevent Albany from gaining an undeserved windfall from federal tax reform.”

According to analysis by the State Tax Department, nearly every New Yorker could be impacted and face higher state taxes as a result of the federal changes.

Among the hardest hit would be so-called “single” filers who would lose a key personal exemption that alone is worth hundreds of dollars in tax savings.

“Hardworking New Yorkers pay enough in taxes, and we don’t need to reverse the gains we’ve made in making New York more affordable,” Senator Ritchie said. “That’s why this bill is a top priority, but also just a first step in ensuring that recent federal tax changes don’t result in higher taxes here in New York.”

Since taking office, Senator Ritchie has sponsored and repeatedly voted to lower taxes for New Yorkers, including the largest-ever state income tax cut that took effect January 1.

She also has voted to stop cuts to the popular STAR property tax relief program and for restoration of the STAR rebate checks for homeowners.

5 Comments

  1. This is possibly why the very same people who typically make good money don’t seem to mind voting for every school tax increase that usually increases their property values as a result. They just deduct it on their itemized returns.
    As I see it, it’s very similar to someone who works for a company and gets reimbursed for business or travel expenses when going to a convention or a job training seminar. For example, there’s little reason to eat lunch at a fast food place when you can go someplace better and just hand in your receipts to the company later for reimbursment. As long as it isn’t too extravagant, (like Surf &Turf), they usually don’t question it. However, when your’re paying for it directly out of your own pocket, you’re usually looking for a cheaper hotel rate when making a reservation. The comparison is valid as I see it.

  2. It is not unusual for a practicing Christians to donate 10% of their salaries to support their church and other worthy causes. That is a huge deduction to lose, when you consider that in combination with NY outrageous school taxes, sales taxes, income taxes, property taxes, travel expenses for work- can only total $10K. Not everyone gets reimbursed. When you pay these, you’re paying “full” dollars. When you deduct this expenses, you’re only given credit for “partial” dollars. It is not a straight dollar for dollar reduction of tax. Your comparison is invalid, Wizard

  3. The problem with tax cuts is it kills long term benefits. Without solid education, our economy is doomed yet the right wing extremists want to reduce us to a third world nation. They finally found a way to make the successful states suffer for their success.
    Fact is that these states that got hit by the tax hikes are also the ones who always put more money into the feds than they took. Now their share is even greater, while limiting their ability to maintain a strong local economy. That will only end in more corruption, and a poorer country.
    Perhaps instead of targeting the states that are succeeding, they should target the states that are failing and fix them.
    Not to mention I thought republicans were for local power over federal power, so why then did they just vote in Bigger federal government at the cost of local government? Are republicans liars?

  4. Tax hikes? Where?
    New York remains the highest taxed state, and continues to be number one in people and businesses migrating away. California, number 2 in highest tax rate, is also near the top of list for people and businesses migrating away from.
    If these are examples of “successful” states, then I question where your dictionary was written.
    A lower federal tax burden benefits everyone. If higher earners lose their state tax deduction, the answer is lower state taxes, not keeping a higher federal rate in place.
    Empowering people with more of their hard earned money does not equate to federal control. High state taxes are the true form of control, exercised more in this state than any other.
    Are Republicans liars? No. The question I believe is, can Democrats really be that clueless regarding basic economics.

  5. re: Tax Guy:
    Sorry,..I didn’t mean to make it sound like they “don’t pay anything” in taxes. My comparison could certainly be different depending on a companies policy,… some may only allow up to a certain amount for reimbusment, others may just let you use your own descretion, or common sense. Still, I think that “the mindset” may have some merit, as it would seem that even “partial dollars” would make it easier to vote for any tax increase as opposed to being totally against it. Take Sin Tax for example. If it doesn’t impact you the same way as it would someone else, it’s not as much of a hardship. So if you don’t smoke, you don’t mind any increase in cigarette tax, as an example. And if you get some of your tax dollars back, that ease’s the pain somewhat. If you think it’s that bad, don’t itemize. See which one is worse, and which one benefits you the most.

    re: Steve:
    Sorry, but I don’t think the “right wing extremists” want to reduce anyone to a third world nation. Even the poorest of states in the U.S. are probably better off than most Third World countries, depending on which one you are talking about. As I see it, there seems to be people who actually think that turning the U.S. into a Third World country would be a good thing, for equality purposes. Since it’s much harder to build those countries up than it is to bring our’s down, that seems to be the mission, sometimes refered to as “The New World Order”. (Probably much more of a Progressive idea as opposed to Right wing Extremists). I think it started with the formation of the United Nations.

    As for states that are failing, the same could be said about many of the nations largest cities too, very often run by Democrats for decades. Population will often dictate why some states pay more than others, as well as high taxation enacted by those who raise it and others who vote for it.
    As for so called “states rights” vs. the Federal government, I probably agree with you on that, but only because I think there are just as many Democrats who are liars as well. Unfortunately, local government is limited to the city limits, and state government is limited to the state line. The office of the President has to deal with the entire world, and after 8 years of Democrat leadership, I guess people just wanted things fixed.

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