King, Lowey seek restoration of state/local tax deduction
WASHINGTON — A bipartisan pair of House members from New York said Tuesday that they have introduced a bill to fully restore the deductibility of state and local taxes on federal tax filings — to be ready just in case the opportunity arises to pass it.
Rep. Nita Lowey (D-Rye) and Rep. Peter King (R-Seaford) said their bill would repeal the new $10,000 cap on deductions for state and local property, income and sales taxes, a tough sell in Congress just weeks after it passed the sweeping $1.5 trillion federal tax overhaul.
King said the bill won’t be passed or even make to the House floor now, but at some point, House Republicans in high-tax states hit hard by the new cap could “buy in” into their legislation, which would go into effect this year.
“There will be some buy-in, there’s no doubt about it. There is not enough right now to pass this or get it to the House floor,” King said on call with reporters. “But we’ll build whatever support we can, and then we can manage to move when we think it’s opportune to do so.”
King acknowledged the bill is still a long shot: “It’s not going to be easy. It’s going to be a long fight,” he said. But he added, “Opportunities do develop over the course of the year, whether it’s an appropriation bill, budget bill or some other legislation.”
Lowey and King introduced the bill Monday and it was sent to the House Ways and Means Committee, which wrote the House version of the tax overhaul.
The committee chairman, Rep. Kevin Brady (R-Texas), indicated he will not take up their bill. “The new tax reform law delivers lower taxes and jobs for families and businesses including in high tax states like New York,” he said in a statement. “It also ends the era of ‘tax to the max’ because it pulls back the curtain so New Yorkers and others can see the terrible tax burden their state and local governments are forcing them to bear.”
The legislation also serves the political purposes of both King and Lowey, who like all House members, face re-election in November. It echoes the Democrats’ attack on the Republican-passed tax overhaul, and it gives King some protection on a measure unpopular in his district.
King and Lowey said the loss of the full deduction is all they hear about from their constituents. Lowey said 45 percent of the filers in her district take an average of a $26,000 deduction for state and local taxes — more than twice the amount of the cap.
“My phone is ringing off the hook. People are furious,” Lowey said. “Some of them are talking about leaving” to “move to a state where there are no taxes.”
King said it is the top issue he’s hearing about from his constituents. “Everywhere I go, people are bringing this up,” he said. “They take this as an extra shot at them.”