Welcome to 2018! We barely have time to catch our breath, but it is back to work. Gov. Andrew Cuomo will be delivering his State of the State address on Wednesday and people are eagerly waiting to see if he will offer any additional proposals to offset the impact of the federal tax law changes.
The Empire Center for Public Policy is recommending that state leaders make the tax cap permanent, accelerate the implementation of tax cuts for middle-income earners and ensure that the “millionaire tax” rate is phased out at the end of 2019.
The fiscally conservative think tank issued a series of recommendations to improve the state’s tax climate in light of the new federal tax law, which caps the amount of state, local and property taxes that can be deducted on the federal return.
In a letter to Gov. Andrew Cuomo and members of the Legislature, Empire Center Research Director E. J. McMahon that because “the new federal law will effectively increase the relative economic cost of New York’s high state and local taxes, underscoring the need to reduce spending at every level of government.”
McMahon went on to say that the cap on state and local tax deductions will affect a relatively small number of New Yorkers – extremely high-income earners that are already subject to the temporary “millionaire tax.”
McMahon said state officials should reject any proposals to impose additional taxes on businesses, which are seeing a cut in the corporate tax rate from 35 percent to 21 percent.