Yesterday, New York Governor Andrew Cuomo made a pilgrimage to the White House to beg President Trump for money. New York State has suddenly noticed a $2.3 billion deficit in its budget. The deficit is the result of a self-inflicted shotgun blast to the feet amplified by new caps on the amount of state and local taxes (called SALT) that are deductible from federal income tax.
Cuomo painfully admitted he would now need to cut the state budget as a result of the loss of wealthy residents. The top 1% of New York’s wage earners supply 46% of the income tax revenue. Target them, and some will seek out tax havens elsewhere. Cuomo, of course, looked to place the blame elsewhere.
The pain felt by Cuomo was palpable. “SALT was an economic civil war,” he said, referring to Trump’s tax plan by employing hyperbole. “It literally restructured the economy.” Cuomo claimed this was an intentional attack on Democratic states, made to benefit the Republican states.
What he was referring to was the component in the Trump tax cut that limited the deductions that could be taken for state and local income taxes. The tax code made no provision for particular states, just in reference to those with existing income taxes. Of course, lost on Cuomo is that most states with an income tax — and even additional municipal IT — trend to the Blue. His confiscatory taxes are not the cause, it’s that damned Trump and his lack of deductions!
According to POLITICO:
Cuomo traveled to Washington to talk to his fellow New Yorker about the impact of the federal government’s $10,000 cap on the deductibility of state and local taxes. The governor is blaming the cap, which was included in federal tax reform passed in late 2017, for a drop in revenue that has created a $2.3 billion gap in his proposed budget.
“President Trump talked about the positive impacts of the Tax Cuts and Jobs Act on the American economy, and the President listened to the Governor’s concerns regarding SALT,” Deputy Press Secretary Judd Deere said in a statement. “The President reiterated the negative impact that high taxes in states like New York have on hardworking families and job creators.”
Cuomo claimed that President Trump seemed open to revisiting SALT
“You’re hurting the economic engines of the nation,” Cuomo said, adding that he hopes that House Democrats will support him and other blue states on the issue.
“This should be right at the top of your list,” he said. “If the Republicans ask for the time of day … the Democratic Congress should ask for reform for this SALT tax provision.”
This statement by Cuomo, as to be expected, is utter bullsh**. State government taxation based on that taxation being deductible on federal taxes to avoid a popular uprising is not and “economic engine.” Just the opposite, the extortionate taxation found in New York, California, and a handful of other states is a drag on economic development in the state and in the US. While I have some sympathy for the people getting hammered by this, I don’t have a lot. These people made a conscious decision to elect people who raised taxes to support bloated government agencies all on the promise that it was free, that taxpayers in low tax states were going to be soaked to pay for jobs for New Jersey and New York Democrats. Now they are discovering that the rest of the nation is tired of subsidizing this nonsense. And while those residents might be pissed at Trump over the loss of SALT, those states don’t vote for Republicans for president.
But the White House read-out doesn’t sound that way.
Cuomo signed a typically leftwing anti-science law banning fracking:
— Jon Campbell (@JonCampbellGAN) June 29, 2015
And Cuomo’s refusal to allow new gas pipelines adds about $1,000/year to a New York heating bill.
Then in 2016 Mr. Cuomo blocked a 124-mile pipeline to deliver natural gas from Pennsylvania to New York and New England. The pipeline would have allowed millions in the region to convert to natural gas from dirtier and more expensive heating oil, which would save an upstate New Yorker about $1,000 a year.
Due to Mr. Cuomo’s natural-gas blockade, New England during the winter must import liquefied natural gas from Trinidad and Tobago, which is far more expensive and emits more carbon than shipping via pipeline. (The 1920 Jones Act precludes fuel imports from the Gulf Coast, but that’s another editorial). Power plants that typically run on natural gas must also switch to oil during cold snaps due to high demand for and inadequate supply of natural gas.
Basically, Cuomo, who has spent more time than is seemly talking smack about President Trump, essentially got a bum’s rush. He came to DC to beg for federal handouts to cover his budget deficit and to pay for a New York City tunnel. He got lectured on fracking, the free market, and the evils of abortion. All in all, a memorable visit.
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