Local Homeowners 'Taxed Out' As New Federal Tax Code Takes Effect
GARDEN CITY, N.Y. (CBSNewYork) -- With the new year brings a new federal tax code, which means higher taxes for many in our area because of the elimination of local and state deductions.
As a result, local lawmakers are looking for options.
Last week, taxpayers lined up and took advantage of their last chance to deduct property taxes before the new federal tax code took effect in the new year.
Even still, that only softens the blow for one year. Economists like Dr. Martin Cantor are urging state lawmakers to get to work and plot among long term relief.
"They should look at the powers they have in the New York State constitution and change the laws that they can control that will not be reviewed and possibly overturned by the federal government," Dr. Cantor told CBS2's Carolyn Gusoff.
The opening of the 2018 legislative session has state lawmakers focused on what many call job one; reshaping the state tax code to make up for the loss of federal exemptions.
"I think our first objective is to save the financial lives, if you will, of homeowners in the state of New York," State Senator John Brooks (D-8th) said. "There is no question we will have to think outside the box."
Brooks says New York needs to rethink its reliance on property taxes to fund schools. Other ideas being floated include replacing state income tax with payroll taxes which are still able to be deducted and allowing state income tax to be paid as a charitable contribution.
Congressman Peter King (R-NY) and Senate Minority Leader Chuck Schumer agree it's time to think creatively.
"I would urge the governor and state legislature to be innovative, to come up with any ideas," King said. "If the federal government takes advantage of us, there is no reason why the state can't counter that."
"If you can relieve the burden on middle class New Yorkers, particularly suburban New Yorkers who suffer the most, go for it," Schumer said.
Critics say high-tax states should simply spend and tax less. Dr. Cantor says school districts must seriously consider consolidation.
"Their job is to educate and to provide resources for programs, their job is not to cut spending," he said. "But now maybe they have to."
Senator Schumer says Nassau County is the most impacted county in the nation, with residents not only paying taxes upon their taxes, but possibly also being pushed into a higher federal tax bracket with the loss of SALT deductions.
State officials are also challenging the constitutionality of the new tax code, which some argue unfairly singled out parts of the country for double taxation.