Say ‘No’ To Tax Reforms That Victimize New Yorkers Editorial
When President George W. Bush’s tax advisory commission recently proposed changes in this country’s tax system, it must have been considering the effect of those changes on only 49 states, because the revisions are a disaster in New York.
The proposals were scheduled to be submitted to the president yesterday. According to some reports, the president is not committed to adopting these latest radical changes and, if past actions are a true indication, the Congress will not look favorably upon them either.
Since the proposals punish New York state taxpayers almost exclusively, elected officials have complained loudly about them and called upon the president to reject them.
There has to be something terribly wrong with these recommended changes when Governor George Pataki, the Republican governor, and Democratic Senators Charles Schumer and Hillary Rodham Clinton, who never agree on anything, have all called for them to be rejected.
The president had called on the commission to simplify the tax code, which is commendable. In response, the panel recommended fairer and simpler tax rules, reducing income tax brackets and eliminating the Alternative Minimum Tax (AMT). This tax requires some high-income persons to pay some tax even if their tax return honestly absolves them of paying any tax. The measure has become unpopular because many middle-income taxpayers are getting socked by it.
But two other proposed changes really stick it to New York taxpayers.
One eliminates the deductions of state and local taxes. The other would lower the amount of the deduction taken on interest paid on a mortgage and would disallow deductions on interest paid on home equity loans and on mortgages for second homes.
These provisions would be phased in over five years to allow taxpayers to adjust to the changes. This is of little help to a homeowner who bought a house with a high mortgage with the expectation that every year he or she would get some helpful deductions on income taxes based on the mortgage payments.
Millions of Americans including New Yorkers, make all kinds of sacrifices to achieve the American dream of owning their own home. They make these sacrifices willingly, based on the assumption that they will get some small benefit back in the form of the mortgages deduction on their income taxes.
But now, an advisory tax commission comes along and, seemingly without realizing the consequences of the changes they propose, would make the American dream a nightmare for millions stuck with a mortgage and would kill that dream for millions of others who would be very wary of taking out a mortgage.
The panel’s recommendation is totally unfair!!
The same applies to the proposed elimination of deductions for state and local taxes. Since we in New York are victimized with the highest taxes in the country, we would collectively lose a $12 billion benefit at tax time each year. Taking this $12 billion away from New York state taxpayers would not only hurt personally; it would also hurt the state’s economy by removing that much cash from circulation.
We already send Washington $6 billion more in taxes than we get back, according to the nonpartisan Tax Foundation. Add in another $12 billion that the eliminated tax deductions would take out of our pockets, and the tax advisory commission would truly add insult to injury.
We repeat: the tax advisory panel’s recommendations are totally unfair to New Yorkers and should not be adopted.
Our elected lawmakers from Queens and throughout our city and state must redouble their pressure on President Bush to reject these ill-conceived changes. If he does not, and asks the Congress to approve them, we say categorically to our elected representatives: Do not enact them!!