Though steps have been made to help New York’s middle class, Governor Andrew Cuomo called out the Biden administration for not fully repealing the SALT deduction limits passed under the Trump administration.
Governor Cuomo stated that two big changes were made to the budget, the first of which was lowering the income taxes of middle-class New Yorkers. Under this new bill in the New York state budget, the income tax rates dropped from 6.09% to 5.97% for those filing jointly in the $43,000-$161550 income bracket, and for individuals in the $21,400-$80,650 income bracket.
Those in a higher tax bracket also saw a slight decrease. The taxpayers filing jointly in the $161,550-$323,000 income bracket and individuals in the $80,650-$215,400 bracket saw a slight decrease from 6.41% to 6.33%. The changes to the middle-class tax bracket will help 4.8 billion New Yorkers save over $2.2 billion this year.
Second, Cuomo announced that the state is enacting a Middle Class Property Tax Credit. New York has some of the highest property tax rates in the country: the average middle-class downstate New Yorker will pay $10,500 a year in property tax compared to $7,800 a year in income tax.
According to Cuomo, property taxes on Long Island and in the Hudson Valley, including those in Nassau, Westchester and Rockland counties are among the highest in the nation by dollar amount, and while upstate areas, such as Binghamton, Syracuse and Rochester, have lower home values, the property taxes are the highest by a percentage of home value.
The new tax credit would provide over $382 million in savings for 1.1 million New York homeowners with an income of up to $250,000 per year. Both changes were signed into law during Cuomo’s press conference on April 19.
“Property taxes are the worst tax in the state of New York,” said Cuomo. “When people talk about high tax New York, they are talking about the property tax. We passed a permanent property tax cap at 2%, first time ever in history. We passed it 9 years ago. It saved almost $60 billion in 9 years. But there’s no doubt that if you want to make a difference from a tax point of view in this state, it’s about property taxes.”
However, Cuomo says that a bill passed about three years ago has New York struggling further. Passed in 2017 under the Trump administration, SALT limits the amount of state and local taxes that a taxpayer can deduct from their federal return, capping it at $10,000 for single filers or married couples filing jointly.
According to Cuomo, SALT made property taxes worse for New York State, costing New Yorkers an additional $30 billion over the last three years.
“I call it the SALT assault, it affected virtually the entire state,” said Cuomo. “It limited deductions to $10,000 — most New Yorkers have deductions twice that level. It cost on average $2,600 per home. And because of SALT in 2017, New York had the largest tax hike of any state in the nation.”
Several New York federal officials spoke out at the time when SALT was passed, condemning the move. Cuomo says that when passing the dropped tax rates, the state passed it with the federal government repealing SALT in mind — if repealed, New York’s top earners would see their tax rates drop by 37%, with the state’s new top 10.9% surcharge dropping to 6.9%, effectively lowering taxes for everyone. In the end, it would mean $12.3 billion going back to New Yorkers.
Cuomo set his sights on the Biden administration, which he says has yet to repeal the SALT deductions, as well as the federal New York officials who spoke out against the bill when it passed.
“So to Congress, my message is simple. On behalf of all New Yorkers who pay taxes, don’t pass another bill until you fully repeal SALT,” said Cuomo. “No political deals, no political games. Fully repeal SALT. It was a political attack on this state. It was a partisan, political attack on this state. You promised to repeal it, now is the time to do it. Lower our taxes, help our economic recovery, reverse the 2017 SALT in the wounds bill. I can’t say it more clearly, but trust me, it is what every New Yorker knows and feels.”