Governor Andrew Cuomo of New York is privately urging some of the state’s richest business leaders to stay in the Empire State and lobby Congress to lift the federal limit on state and local tax deductions, known as SALT. According to an individual with direct knowledge of the situation, Cuomo used a conference call on Thursday, to address the issue with a selected group of executives, which included Wall Street financiers. This person did not want to be identified in order to talk openly about a private conversation.
“As business pioneers, we ought to request that individuals stay in New York and attempt to get SALT in the new assessment charge,” a source acquainted with the call said. To back framework, the Biden organization expects to fix some of previous President Donald Trump’s 2017 expense change law. As part of any reforms, some Democrats, including Cuomo, are urging the White House to eliminate Trump’s $10,000 limit on SALT deductions. A representative for Cuomo didn’t react to a few solicitations for input.
The combined local and state personal income tax rates for New York City’s richest executives would likely be higher than those for wealthier California citizens under Cuomo’s recently signed state budget. The highest tax rate for single filers with more than $1 million would be increased to 9.65% from 8.82% as part of the state’s more than $200 billion budget. Those earning between $5 million and $25 million would pay a 10.3% tax rate, while those earning more than $25 million would pay a 10.9% rate. The new taxes will be imposed on high earners in the upcoming tax season, with the rates set to expire in 2027.
With taxes on the verge of reaching record levels for the rich in the Big Apple, wealthy New Yorkers have previously indicated to CNBC, that they may leave the city and relocate to Florida. Cuomo’s meeting with these executives comes as he faces accusations of sexual assault and mishandling of nursing home death data during the Covid pandemic. The allegations of sexual assault against Cuomo have been refuted.
Cuomo has previously stated that he intends to run for a historic fourth term in 2022, and stopping big companies and their executives from leaving the city could help him gain support for a new campaign. As per another Siena College Research Institute survey, 33% of respondents would cast a ballot to reappoint Cuomo in the event that he ran one year from now, while 57% would pick “another person.” Cuomo had asked for the SALT limit to be lifted in the past. Cuomo stated in April that repealing SALT would result in a 37% reduction in the effective tax rate for the state’s highest earners. He clarified that the state’s current highest tax rate of 10.9 percent becomes an effective tax rate of 6.9 percent. Cuomo was among a group of governors who wrote to President Joe Biden, requesting that the SALT limit be repealed.
When there was no limit on SALT deductions, which include property and income taxes at the state and local levels, taxpayers, especially wealthy people in New York and other high-tax states such as New Jersey and California, benefited the most. New York business leaders, including the Partnership for New York City, have pressed Senate Majority Leader Chuck Schumer, D-N.Y., and Biden’s team to reinstate the full deduction. Some Democratic lawmakers, including Reps. Tom Suozzi of New York and Josh Gottheimer of New Jersey, have stated that they would reject any changes to the tax code until SALT is reinstated.
The SALT deduction “will not be a revenue raiser,” according to White House Press Secretary Jen Psaki, and it’s unclear if the Biden administration intends to repeal the limit as part of their infrastructure strategy. To fund his $2 trillion infrastructure plan, Biden wants to increase taxes. Biden has stated that he is willing to increase the corporate tax rate to between 25% and 28%, in order to fund his infrastructure initiative, but has pledged not
