Cuomo, Mulvaney trade barbs over tax reform

White House budget director defends tax reform plan, says feds are not to blame for New York's high taxes

The debate over a GOP tax bill is getting spicy after a Republican congressman slammed the White House budget director for trying to "screw" his state.

Officials in blue states like King's have slammed the GOP tax reform bill for including a provision to eliminate the deductions for state and local and income and sales taxes, known as SALT deductions, that are now used by millions of Americans every year.

Mr. King has vowed to oppose the tax bill unless this piece is taken out, but Mr. Mulvaney doubled down on Tuesday saying the current system is unfair to other states.

"I'll make it simple: Just give NY the $48 billion we send to Washington that makes us the number 1 donor state in the nation and he and the President can do whatever they want with state and local tax deductibility", Cuomo said.

He noted that Mulvaney recently argued high-tax states should take responsibility for their own high tax rates and stop making taxpayers in lower-tax states subsidize them through a break in the federal tax code.

My colleague Dan Freedman reported Tuesday that Office of Management and Budget Director Mick Mulvaney, in a meeting with reporters, had a simple message in response: "Whose fault is that?"

"If you reduce the revenues the state collects, which I believe is going to be a effect of their tax reform, then you either have to decimate health care, education or you'd have to find additional revenue", Cuomo said during a conference call with reporters last week. "Why should I pay more federal taxes than you do?"

"Even with the federal deduction [for state and local taxes], people have been leaving NY - high income folks have left already", he said.

Meanwhile, the situation was reversed in SC, a low-wage state where the average taxpayer contributed $4,921 to the federal government while per capital federal benefits of $10,791 were greater than in NY.

And he stressed that if a South Carolinian earned the same amount of money as a New Yorker, the South Carolinian would likely pay more in federal taxes just because the New Yorker would benefit more from the SALT deduction. "And they use an argument inside that Capitol, 'Let's raise taxes, as you can write it off on your federal income tax.' Well, that's not fair for all of America". "If you savage the people paying 77 percent of the revenue, where are we going to get that revenue back?"

"We've been subsidizing Mick Mulvaney and his constituents for years", King said.

In conference call to reporters last Thursday, Reed said that in both the House and Senate versions the standard deduction increases from $12,000 to $24,000, meaning a larger number of people won't be itemizing because the standard deduction will surpass any package of deductions filers are now using.

However, Reed acknowledged the Senate bill contains no property or income tax deductions. "And now he seems to use every opportunity to take shots at NY".

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