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Congressman Pete King

Representing the 2nd District of New York

Bill easing federal tax law that hit many Long Islanders hard passes House

Dec 19, 2019
In The News

The Democrat-led House of Representatives passed a bill Thursday designed to revise a federal law that has worsened Long Islanders’ tax burden. But odds are the bill will stand little chance of passing in the Republican-controlled Senate.

“This is a really important bill for the people of my district,” said the legislation's sponsor, Rep. Thomas Suozzi (D-Glen Cove), in an interview. “In the midst of all this turmoil in Washington, the fact that I could get a bipartisan bill passed is a real sense of satisfaction.”

The bill was supported by Rep. Peter King (R-Seaford) and a few other Republican House members. It's aimed at revising the 2017 federal law that gave tax breaks to most middle-class families nationwide, the wealthy and corporations. To pay for it, the law capped how much taxpayers could deduct on their federal income tax returns for state and local taxes — often referred to as SALT.

President Donald Trump proposed the 2017 legislation that capped the deduction allowed for state income and local property taxes at $10,000. As a result many, Long Island residents as well as those in Westchester, Manhattan, New Jersey and  several other northeastern and predominantly Democratic states, are paying more in federal income taxes.

Suozzi’s bill would be phased in and ease the burden of Trump’s tax measure for two years, when Democrats hope to control the White House and repeal the president's tax law. The bill would increase the allowable cap to $20,000 for couples filing jointly in the 2019 tax year.

Under the bill, full deductibility for state and local taxes on federal income tax forms would be restored in the 2020 tax year. To replace the lost revenue, Suozzi said the bill would return the top individual income tax rate to 39.6%, which was cut to 37% under Trump's tax law, giving wealthy filers a break.

“In some ways, you could call it the suburban relief act,” said Lawrence Levy, executive dean of the National Center for Suburban Studies at Hofstra University. “Unfortunately for the beleaguered taxpayers, there’s not much of a chance of it going anywhere in the Senate, but at least it sets down a marker for the future and maybe boosts voter confidence that someone is at least trying to do something.”

Trump has indicated he would likely veto Suozzi’s measure if it reached his desk. He blames states like New York for their high taxes that exceed the federal law’s cap.

King noted that Trump, as a private citizen and taxpayer, opposed capping SALT in 1986 because it would “hurt the states that work the hardest.” New Yorkers pay far more into the federal government than the state receives back in aid and benefits.

“I’m really disappointed with my Republican colleagues,” King said in the floor debate. “One of the reasons why cities like New York and counties like Nassau and Suffolk had to raise property taxes is because for 50 years we’ve been subsidizing your states … Now, you’re turning it into class warfare. What you are doing is undermining the middle class.”

King said he doubts the bill will get traction in the GOP-controlled Senate, which approved the 2017 tax law. But he said Suozzi’s bill could see new life as part of a deal on other measures.

Rep. Lee Zeldin (R-Shirley) voted against the bill. He had opposed the bill’s provision that would raise the 37% top individual tax rate for taxpayers with incomes greater than $518,400 back to 39.6%.

“It’s important to remember that the only SALT deduction legislation that will ever provide relief is legislation that can be signed into law, and this bill which permanently raises taxes on individuals and small businesses is not it," Zeldin said.