Rep. Peter King, a staunch opponent to the current version of the House Republicansâ€™ tax reform plan, said the elimination of the state and local tax (SALT) deduction could increase the average New York homeownerâ€™s taxes by at least $1,000.
â€œMaybe more than that -- $2,000 to $3,000,â€ King, R-N.Y., told Maria Bartiromo on â€œSunday Morning Futures.â€ â€œItâ€™s difficult to fully compute it right now, but thereâ€™s no doubt there will be increases.â€
King and other lawmakers from high-tax states, which include New York, New Jersey and California, argue that getting rid of these deductions will hurt hard-working, middle- to upper middle-class people. The New York Republican has said that the reason why New York is considered â€œhigh-taxâ€ is because much of the revenue that goes to the federal government isnâ€™t returned to the state.
â€œNew York gets $48 billion less from the federal government than it pays in revenues,â€ he said Sunday. â€œOther states get almost twice as much back as they put in, so we have to make that up somehow. If we can get that $48 billion back in New York, that would make it a lot easier for us to reduce tax rates.â€
King said his region is being treated unfairly since other states will not see such an impact. In nearby New Jersey, Senate President Steve Sweeney said last week that his state, as well as New York and California, are â€œunder attackâ€ by conservative lawmakers in the nationâ€™s capital.
â€œIf we lose the millions of dollars that theyâ€™re talking about and taxes are going to be raised on average families by $2,500 when they lose the deductions theyâ€™re going to get, how can you do anything? Right now we have to re-evaluate where weâ€™re going to go,â€ Sweeney said during an interview on FOX Business.
Much like Sweeney, the New York congressman said he could see a mass exodus happening in his state if tax rates go up on residents, which he also explained includes parts of the stateâ€™s business community.
â€œBig people in the business community who feel this is going to terribly impact them â€¦ they are talking about moving their address to North Carolina, Florida, wherever â€¦ and that then will have a compounding effect because thereâ€™ll be less state revenues available. That means local governments will have to raise property taxesâ€”itâ€™s really a vicious cycle,â€ King said.