Gov. Andrew Cuomo on Tuesday blasted the IRS for coming out new rules that undercut the state’s efforts to mitigate the impact of the federal tax law that capped at $10,000 the amount of state and local taxes that people can deduct on their federal return.
The changes in the 2017 tax law to the state and local tax deductions, referred to as SALT, has been a sore subject for Cuomo. The governor has alleged that the federal government was targeting high-tax, mostly Democrat leaning states with this tax plan change.
New York has sued the federal government over the change. Cuomo also has considered making a workaround to allow people to create charitable funds to pay their taxes, which can then receive a tax credit. However, the IRS issued new rules on Tuesday that prohibit those types of arrangements.
Cuomo accused the federal government for continuing its “politically motivated economic assault” on the state.
“The IRS should not be used as a political weapon,” he said in a news release. “The regulations promulgated today lack any basis in the law, upend decades of precedent without authorization from Congress, and target programs established by New York and other states to incentivize charitable contributions,” he said in a news release.
Cuomo also pointed out that New York sends $36 billion more to Washington, D.C. than it receives back.
When the SALT cap went into effect, Cuomo claimed that there was going to there was going to be as much as a 25-percent tax hike on residents and cause higher income residents to leave the state.
However, the Empire Center issued a report saying that most New Yorkers paid a lower federal tax bill because of the rate cut and the increase in the child care credit. Most of the impact was to the top 1% of income earners, who generate 40% of the state’s tax revenue.
Cuomo continues to blame the federal government for the fact that New York has high taxes, which is under state lawmakers’ control.
I also have an issue with him saying that the IRS should not be used as a political weapon. During the Obama administration, conservative groups claimed that their organizations were targeted for unfair scrutiny by the IRS.