While some taxpayers are struggling to figure out why their tax returns are smaller, one whole state is asking Uncle Sam for tax relief.
From itself.
And the request has Republicans in Washington shrugging and looking at their buddies, asking, “Is this guy for real here, or what?”
One reason the tax cuts pushed through by Republicans in Congress weren’t quite as well liked in blue states was the $10,000 cap placed on state and local deductions. Now higher-income people living in states with higher income tax rates are having to pay more money to their state and the federal government.
For example, residents in a (blue) state like Oregon have a top tax rate of 9.9 percent, much higher than the top tax rate of 2.9 percent in (red) North Dakota, according to the Tax Foundation. Normally, that might frustrate taxpayers, but up until these new tax cuts, they were able to deduct their higher state taxes so they didn’t have to pay as much to the feds.
Now those deductions are capped at $10,000, leaving blue states with higher tax rates in a difficult situation with angry taxpayers.
Likely tired of hearing from residents who are now being taxed heavily on two fronts, New York Gov. Andrew Cuomo traveled to Washington to ask for a return to special treatment. But The New York Post reported Sen. Chuck Grassley (R-Iowa), top Republican on the Senate Finance Committee, shot down Mr. Cuomo’s request:
“The Senate Finance Committee won’t be revisiting the SALT deduction reforms made in the Tax Cuts and Jobs Act,” a spokesperson for the senator said. “The answer to the problem is for states to lower their taxes instead of insisting that taxpayers from lower-tax states subsidize their profligate spending.”
You know, the gentleman from Iowa, or at least his spokesman, makes a good point. These several states are perfectly willing to help New York when a hurricane hits, but it has to be a literal hurricane, not a financial storm. In other words, Mr. Cuomo, this sounds more like a personal problem. For you and 20 million of your friends.
If taxpayers are angry in New York state, maybe the governor there could call the governor here and ask about Asa Hutchinson’s playbook over the last few years. The other day, in The Wall Street Journal, a whole editorial featured Arkansas’ recent tax cuts. That’s big-time play in the state promotion business. New York is making the papers for its tax burden, Arkansas is making the papers for reducing it.
There’s another advantage to living in Arkansas: barbecue. Any New Yorkers are welcome to come on down for a try. Y’all’ll get used to the accents.