Cuomo tries to spin tax hikes as ‘net reduction’ if feds give back SALT

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Gov. Andrew Cuomo on Wednesday tried to downplay the potentially devastating impact of looming state tax hikes — claiming there will be an overall “net reduction” for New Yorkers if the federal government restores a deduction for state and local taxes.

Cuomo called the elimination of the “SALT” deduction as part of former President Donald Trump’s 2017 tax cuts “a targeted assault on New York and other states” that was costing New Yorkers “$13 billion or more a year.”

Cuomo said both of New York’s senators and some from other states had agreed to make restoring the federal deduction a “priority.”

“When that happens, there will be a net reduction in taxes,” he said during a virtual news conference from Albany.

But experts say that is a big “if.”

EJ McMahon of the conservative Empire Center think tank in Albany said, “There is absolutely no assurance that the SALT cap will be repealed, unless federal rates are jacked up higher than [President ] Biden already has proposed.”

McMahon said that “the SALT change was a major revenue-raiser designed to offset the cut of middle-class tax cuts in the 2017 Trump tax law” and that Cuomo was counting on “Democratic congressional representatives from all over the country to approve a change designed to save money for very high earners” in New York, California, New Jersey and Connecticut.

The state’s overdue, $212 billion spending plan for 2021-2022 calls for increases in personal income tax rates for individuals earning more than $1 million annually and for couples earning more than $2 million.

It also raises the corporate franchise tax for businesses with annual profits over $5 million.

Critics — including Democratic mayoral candidates Andrew Yang and Ray McGuire — have warned that the tax hikes could lead companies and wealthy residents to flee the Empire State for lower-tax locales.

Also Wednesday, Cuomo said a controversial, $2.1 billion plan to pay illegal immigrants up to $15,600 in unemployment benefits each won’t go into effect unless Attorney General Letitia James signs off on its “anti-fraud protections.”

The state Senate approved the budget early Wednesday, but the state Assembly has yet to vote on four of the package’s 10 bills.

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