The following Op-Ed piece is submitted by New York state Assemblymember Patricia Fahy (D-109) in opposition to proposed tax reform legislation. Both the House of Representatives and Senate each passed legislation to reform federal taxes. There must now be a reconciliation between both houses before any changes are to be made to tax law.
News from Washington worsens daily, especially for our pocketbooks, as President Trump and Congressional leaders railroad through the so-called ‘tax reform’ bill into law. Sadly, instead of helping hardworking families, the plan will balloon the deficit to the tune of $1.5 trillion, while benefiting the wealthiest and giant corporations at the expense of everyone else, including whole swaths of the Capital Region.
When families do their taxes and discover they owe hundreds or thousands more, it will cause undue financial pain for seniors and the middle class. New York would see 1.6 million taxpayers in the bottom 80 percent of income earners pay more in taxes by 2027 under the House bill, with even more families negatively affected by the Senate version of the bill. More than 62 percent of the Senate bill’s tax benefits would go to only the top 1 percent of income earners!
One of the most detrimental impacts comes from the proposed reduction of the State and Local Tax Credit (SALT). Governor Cuomo could not be more correct in calling the planned reduction of SALT a “gut-punch” to New York’s middle-class. Over three million New Yorkers claimed an average deduction of more than $21,000 in 2014. The nonpartisan National Association of Realtors estimates this could reduce the value of homes in New York by a whopping average of 10 percent. The bill also eliminates the Historic Preservation Tax Credit, which has been instrumental to the revitalization of downtown Albany and Troy, as well as countless “main streets” throughout our towns, region, and state.
In the Capital Region, where the largest economic sectors aside from state government are healthcare and higher education, this bill would be particularly devastating. The House bill would cut $1.7 billion in Medicare funding from New York next year, and increase the state’s uninsured population by close to one million people by 2019, dramatically swelling healthcare costs for the state and for patients. More than 450,000 New Yorkers claimed an average of $9,800 in medical expense deductions in 2014, which simply would be eliminated under the plan.
The plan would also count tuition waivers given to most graduate students as income, nearly doubling their tax liability overnight, severely crippling the ability of many colleges and universities in our region to attract graduate students. Even worse, over 780,000 New York taxpayers claimed an average of $1,100 dollars in student loan interest deductions, yet another a deduction eliminated under this plan.
Once you take a close look at the details of this tax plan, it becomes clear just how much the wealthiest benefit while the majority of families I represent do not. It is heartless to tell a teacher they can no longer get a tax deduction for buying extra school supplies, or to tell a new homeowner they can no longer deduct the interest they pay on their mortgage, or the recent college grad drowning in student loan debt, ‘sorry, you can’t deduct the interest you pay.’ The deductions that families depend on and routinely use here in Albany County will disappear and harm the revitalization of our communities in order to help pay for a huge corporate tax cut.
I could not be more opposed to this stocking full of coal for the Capital Region delivered just in time for the holidays. Let’s be clear: this plan pits the uber-rich against the rest of us – and the wealthiest win.
Assemblymember Patricia Fahy
Representing Albany, Bethlehem, Guilderland and New Scotland