Bush Plan Could Imperil Tax Write-Off for New York (interesting article; this is an excerpt)

NYT ^ | IAN URBINA

[alessandrofiaschi]

Bush Plan Could Imperil Tax Write-Off for New York By IAN URBINA December 27, 2004

As the Bush administration looks to revamp the tax code, New York officials say they are particularly worried about one idea being considered: eliminating the federal deduction for state and local taxes. If the president pursues this plan, New York State would lose about $37 billion per year in federal tax deductions, more than almost any other state, according to Internal Revenue Service data. The change would affect about 3.2 million households in New York, three-quarters of which are middle- and low-income, tax records indicate.
"This change would be one of the worst things for New York to came out of Washington in a long time," said Senator Charles E. Schumer. "But if they take this route they can expect a serious fight." With a 7.7 percent maximum state income tax rate, the second-highest in the country behind California's 9.3 percent, New York would be especially affected because its residents use those taxes to take large federal deductions. About 38 percent of households in New York file for some sort of federal deduction of state and local taxes.
New York City residents, who also pay city income taxes, would be especially hard hit as they could expect an 11 percent increase in the amount they pay the I.R.S., or an increase of about $3.4 billion, said Ronnie Lowenstein, director of the city's Independent Budget Office.
Beyond New York, eliminating the federal deduction for state and local taxes would also affect residents in New Jersey and Connecticut. (...)
Claire Buchan, a White House spokeswoman, said it was too early to discuss specific plans. "The president has yet to appoint the panel that will review the tax code and (...)

[alessandrofiaschi]

Differently from many Dem-or-RINO commentators, I think that this change would be in the right direction of a fairer tax code and more responsability between the several level of our Payment System. Besides, as even this columnist writes, such a change would be to offset the cost of certain tax cuts that the White House hopes to make in areas like savings and investment. In sum, these complex tax reductions entail only less local spending responsability. They must finish! What's your opinion?

[alessandrofiaschi]

PING!

[Red Badger]

Why should W worry over NY? They are Blue in 2000 and 2004......

[2banana]

New York Liberals - We know we tax the crap out of residents, however, we want the federal government to subsidize it forever...

[Banjoguy]

Thanks for thinking of me.

Please remove me from this PING list.

ed

[LauraleeBraswell]

First the deduction could be eliminated for the rich: those with income of over $100,000.

[finnman69]

You got it right, it would further expose how NY State rapes us NYers after alredy getting violated by the IRS.

[.cnI redruM]

They're a Blue State. They like high taxes. Make 'em pay!!!!!!

[ScottM1968]

I would be surprised to find that New York is a net tax money loser in the scheme of things.

I know Illinois and other Midwestern states are net tax losers, meaning they lose more tax monies than the get back.

Frankly, I don't mind if a readjustment of the tax code to make it more balanced eliminates New York's skewed money base.

[goldstategop]

Since New York turned its back on Bush twice, he can tell it to go take a hike.

[LauraleeBraswell]

We need to balance the budget: this is the way to do it!
This is a states rights issue. The blue states want a tax increase and the red states don't.

[alessandrofiaschi]

IF YOU WANT TO BE "PINGED" ABOUT "TAXES AND ECONOMICS", PLEASE SEND ME A POST (IN PUBLIC OR IN PRIVATE). THANKS.

[shellshocked]

Another tax increase. Taxing taxes.

[MeekOneGOP]

I think New Yorkers should put the heat to New York State and City for the high taxes the taxpayers are paying out.

Not looking to get flamed, but it seems the state expects the taxpayers to keep doling out more and more and more and more. The article says they have one of the highest tax rates. Sounds like it's time to tighten up. That means the state and city.

There has been whispers that Texas may have to start a state income tax, but taxpayers will get the big sticks out if they try, and I think the pols know it, too. They get us here via the high property taxes. We don't want a stinkin' state income tax.

[hermgem]

Why is Schumer against elimination of N.Y. or all State taxes?
These taxes are hitting the rich, yes riches are the ones that pay these high income taxes.
Schumer according to his tax the rich statements should be elated.
If these taxes turn into reality, low income taxing states, or those with a sales tax only will be beneficiaries.
In total: a victory going to those States with low or no income taxes.
Let States compete amongst themselves when trying to attract businesses through low taxation.
No longer will high taxes be federally subsidized.

[mc5cents]

New York Liberals - We know we tax the crap out of residents, however, we want the federal government to subsidize it forever...

Worth repeating and a great big AMEN brother! Exactly on. This NY (Buffalo) resident is sick of it.

[evaporation-plus]

First the deduction could be eliminated for the rich: those with income of over $100,000.

$100,000 is far from rich in this tax hell!!!!!

[elli1]

New York officials also worry that the change could lead taxpayers, newly burdened with the added expense of lost deductions, to demand lower local and state taxes.

For some, that is just the point. ''If you believe, as I do, that the state and local deductions encourage higher spending in states,'' said Bruce Bartlett, a domestic policy adviser to Ronald Reagan and a treasury official for the first President Bush, ''then abolishing the deduction will help bring this spending down and will also cause people to demand lower taxation.''

And that be what Bloomie, et.al, are really (really) worried about.

[Alamo-Girl]

Thanks for the ping!

[Lonesome in Massachussets]

Another tax increase. Taxing taxes.

Well, yes and no. Why should federal taxpayers be forced to subsidize NYS's enormous educational bureaucracy, for instance? Another thing, on your federal income tax form it says that you cannot deduct the portion of local and state taxes used to pay for certain services such as trash collection, and subsidies for sewer and water. I know of no one who only deducts a portion of state and local taxes. NYC has "free" municipal trash collection, and vastly subsidized water, sewer and mass transit. To the extent that local taxes subsidizes them, they are partially paid for by taxpayers in other states.