10.12.17

STANDING IN HEART OF LI, SCHUMER TO CALL ON EVERY NY HOUSE MEMBER TO OPPOSE REPEAL OF STATE & LOCAL TAX DEDUCTION—AND ANY TAX BILL THAT CONTAINS IT; IF ENTIRE NY DELEGATION OPPOSES BILL GUTTING STATE & LOCAL DEDUCTIBILITY, IT WOULD NOT PASS

GOP Is Moving Full Steam Ahead With Tax Proposal That Is Real Danger To LI Homeowners & Middle-Class; Schumer Details How Plan Totally Eliminates LI’ers Ability To Claim Significant Deductions On State & Local Taxes (SALT); Property Taxes, Too

47 Percent of Long Islanders Use the SALT Deduction With an Average Deduction of $19,886 Now At Risk   

Schumer To NY House Members: Block This Gut-Punch To LI’s Middle-Class Families   

Standing in Rockville Centre, U.S. Senate Minority Leader Charles Schumer launched a statewide push across Congressional districts, urging House members to oppose the repeal of state and local tax deductions as the GOP tax plan unfolds and now endangers Long Island homeowners. Schumer today urged every New York House member to fight against any effort to repeal the state and local tax (SALT) deduction, which thousands of Long Islanders rely on. Schumer said that if the GOP tax plan were to pass, the average Long Island Homeowner could lose about $20,000 from that single deduction alone. Schumer pointed out that this number factors in all four of Long Island’s Congressional districts (NY's 1, 2, 3 and 4). 

 “Whether the savings from these deductions becomes money for home repairs, groceries, school supplies or even the yearly vacation, it belongs in the pockets of Long Islanders, period,” said U.S. Senator Charles Schumer. “These dollars don’t’ belong in the pockets of the U.S. Government so people making millions of dollars a year can catch a tax break of their own. It simply makes no sense for Congress to eliminate the SALT deduction, which has helped steady the cost of many middle-class families living on Long Island. In fact, without them, potential homeowners may look elsewhere which could devastate the local Long Island economy. So, today, I’m saying to every member of Congress from New York: do the right thing and block this gut-punch to Long Island’s middle-class. In the meantime, I will do everything in my power here in the U.S. Senate to fight this GOP-led effort to end critical mortgage, state and local property tax deductions.”

Schumer explained that eliminating this deduction would tug on the purse strings of nearly half of Long Island taxpayers who, on average, claim $19,886 in SALT deductions. Nationwide, approximately 44 million Americans take advantage of this deduction and a repeal could result in more than $1 trillion in losses for taxpayers and their local communities. Schumer said that reductions to—or the removing of these sorts of tax deductions—would hit Long Island particularly hard, given the high local cost of owning a home. Schumer has pledged to fight any efforts that would rollback critical savings deductions used by Long Island homeowners and taxpayers.

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 as well as either income taxes or general sales 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.

The Republican Tax Reform Framework would eliminate the state and local tax (SALT) deduction entirely. Currently, 44 million taxpayers, or 1/3 of all taxpayers, across the country take the state and local tax deduction. The non-partisan Tax Policy Center has estimated that the elimination of this deduction would force state and local governments across the country to raise taxes or cut spending by $135 billion per year. 

The Tax Policy Center says that, under the Republican Tax Reform Framework, taxes would rise for approximately one-quarter of taxpayers, including 30 percent of those with an income between $50,000 and $150,000 and sixty percent of those with an income between $150,000 and $300,000.   The increase in taxes on middle-class families would primarily result from the loss of the state and local tax deduction and the personal exemptions under the plan. 

Schumer went on to say that the Tax Policy Center analysis shows that the doubled standard deduction under the Republican Tax Reform Framework would not offset the costs of the loss of the SALT deduction and personal exemptions for many middle-class families. Taxpayers have to choose between the standard deduction and itemized deductions. About 47% of Long Islanders itemize and nearly all itemizers take the SALT deduction. Under the Republican plan, the loss of the SALT deduction would decrease the value of itemized deductions for Long Islanders by more than half. Families would be left with choosing between a decreased itemized deduction or the doubled standard deduction and no personal exemptions. For many, especially in high SALT areas like Long Island, this would mean a large tax increase. 

Schumer said that the elimination of these deductions would be detrimental to middle-class families in New York, particularly those on Long Island. Across New York, the deduction loss would total about $68 billion per year—that’s $68 billion dollars that state residents will no longer be allowed to deduct from their federal tax returns.

“While the Long Island Association support efforts to modernize the federal tax code and lower rates for the business community, removing the right to itemize property taxes and state income taxes would devastate Long Island residents with a loss of $2.7 billion, and thus we commend Senator Schumer for his efforts to protect our region and the middle-class,” said Kevin Law, President & CEO, Long Island Association.

"The Long Island Builders Institute is very concerned over the possible elimination of both the state and local tax deduction and the mortgage interest deduction and the devastating negative impact such actions will have on the housing industry on Long Island", said Mitchell H. Pally, Chief Executive Officer.  "Just when the Long Island housing market is recovering from the significant downturn, such actions would make it extremely difficult for new home buyers to enter the housing market and for many of our current residents to remain in their homes."

"This is an existential issue for Long Island.  There is no Republican or Democratic position.  It is about the survival of Long Island’s middle class which depends on this exemption as the means to hang on. Whether this proposal is a bargaining chip within a far larger tax bill or the keystone to this Administration’s plan, let’s all be clear we are talking about life or death for Long Island's middle class," said Kyle Strober, Executive Director, ABLI, a Long Island advocacy organization.

"The Long Island Housing Partnership applauds Senator Schumer’s leadership to preserve the federal deductions for state and local property taxes. It is extremely important for all Long Islanders and for the regions housing economy  that these vital deductions be continued,” said Joseph T. Sanseverino, Assistant Vice President, Long Island Housing Partnership.

According to Paul Llobell, LIBOR’s Legislative Committee Chairman, “The elimination of deductions for state income taxes and local property taxes would destroy the region’s economy – especially home values. The results would be devastating and could cause homeownership to be unobtainable for many residents.”

Schumer pointed to Long Island’s Congressional districts as he made his case and launched his statewide push:

  

Congressional District

Percentage of Individuals Using SALT deduction

Average SALT deduction

1

46%

$17,686

2

48%

$20,111

3

43%

$18,386

4

50%

$23,361



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