Uncap It

Not only is New York State a high-tax state — something that is felt acutely on Long Island — it is also the biggest donor state in the nation. New York gets back just 91 cents in federal spending for every dollar that New Yorkers send to Washington, D.C., while some states get back more than $2 for every dollar remitted to the feds.

New York’s taxes are as high as they are for a number of reasons, but one rarely talked about reason is that New York pays its own way. The state does not rely on the federal government to provide infrastructure and basic services to its residents to the extent that many low-tax states do. Another way to put that is: High-tax states like New York keep low-tax states afloat.

There was some relief for New Yorkers. They could write their state income taxes and their local property taxes off on their federal income tax returns. This is known as the State and Local Tax deduction, or the SALT deduction, and it brought a little fairness to a federal tax structure that is largely unfair to states that keep their hands in their pockets while other states have their hands out.

Another benefit of the SALT deduction is that it made homeownership more affordable and property taxes more tolerable. For many people on Long Island, it put the American dream within reach.

The SALT deduction has existed ever since President Abraham Lincoln imposed the first federal income tax in 1861, and it never had a limit. That is, it never had a limit until a Republican Congress and then-President Donald Trump enacted the Tax Cut and Jobs Act of 2017, which set a $10,000 cap. The Republicans and the Trump administration were rather transparent that the move was intended as a swipe at blue states.

Long Island homeowners know that $10,000 is nothing when it comes to their tax bills. Even a run-of-the-mill starter home can have a property tax bill near or exceeding $10,000 in many areas of Suffolk County. And once state income tax is added into the mix, the $10,000 mark is easily surpassed.

At the same time, the federal tax law eliminated the personal exemption and raised the standard deduction — it’s up to $25,100 in 2021 — which makes the capped SALT deduction essentially worthless to many middle-class homeowners here. What was called a tax cut proved to be a tax hike for some.

On April 15, the traditional date of Tax Day, County Executive Steve Bellone and two fellow Downstate Democratic county executives announced they are starting a petition drive to urge Congress — now controlled by Democrats — to repeal the SALT deduction cap. Then, on Tuesday, two Republican Downstate county executives joined the coalition.

This bipartisan effort shows that the SALT deduction is about tax fairness, not about punishing or rewarding blue states or red states based on who’s in charge. The county executives are urging suburban residents to contact their representatives in Congress — for the East End, that is Republican U.S. Representative Lee Zeldin and Democratic Senators Chuck Schumer and Kirsten Gillibrand — to urge them to put partisanship aside and do what’s right for their constituents.

We should expect nothing less of them.