In the coming weeks, many of us will be busy with — that is, distracted by — holiday preparations. December has traditionally been a time to tune out Washington political wrangling. This year is no time to check out, however.
The current debate raging over tax “reform” might soon lead to a congressional vote on a tax package that could have dire consequences for Long Islanders.
Republican lawmakers would have us believe they are working furiously to simplify the nation’s onerous tax code and give hard-working, middle-class Americans a break in their federal income taxes. We say, baloney. Our GOP representatives and senators are seeking massive tax cuts — on the order of 15 percent annually — for corporations, as well as a bagful of goodies for the wealthiest Americans.
Current Republican tax plans, for example, would eliminate the alternative minimum tax, which was first enacted in 1969 to ensure that really rich Americans pay at least some federal income taxes — because, once upon a time, they paid little to nothing by claiming the many deductions available to them. CNN recently reported that President Trump would see a $30 million tax cut if the alternative minimum tax were nixed. Other gifts to the wealthy include the abolition of the estate tax, and the preservation of special treatment for capital gains and the so-called “carried interest” provisions, which candidate Trump said allowed the wealthy to “get away with murder.”
Meanwhile, what would the Republican tax plans — there are two, a House and a Senate version — mean for Long Islanders? Higher tax bills on top of already high tax bills. Here’s why: The GOP plans would reduce or eliminate deductions for state and local taxes and property taxes, which, on the Island, are astronomical. Additionally, they would end the deductibility of mortgage interest payments. This would make home ownership on Long Island even more unaffordable than it already is.
If Republican lawmakers agreed on a unified tax bill and the president signed it sometime in the coming weeks, Long Islanders could see their collective annual tax bill rise by $2.5 billion, according to U.S. Representatives Tom Suozzi and Peter King. You can imagine how sucking $2.5 billion out of the region every year could send our local economy into a tailspin.
The Island is only now starting to recover from two decades of economic upheaval after the Grumman Aerospace Corporation left in 1994 and was reconceived as Northrop Grumman, which now has its corporate headquarters in Virginia. We are seeing an increasing number of high-tech companies either moving onto — or at least expressing interest in — Long Island, largely because of our highly educated workforce. If new taxes on top of already high taxes make the region unaffordable for the middle class, that progress could be jeopardized.
In interviews with the Herald, real estate brokers and agents have expressed grave concern with GOP plans to limit or eliminate the property-tax deduction. Affording a house on Long Island is hard enough as it is. The GOP plan would make it that much tougher.
King, a Republican from Seaford, and Rep. Lee Zeldin, a Republican from Shirley, are fighting hard to defeat their party’s tax plans. We must give credit where credit is due: They have bucked their own party on this one and appear ready to go to the mats to defeat the GOP tax plan.
The only way the Republican tax plan might be defeated, it appears, is this: Suburban voters in high-tax regions like Long Island must raise their voices in unity and signal to Republican lawmakers like King and Zeldin that the plan, if enacted, could mean their defeat in the 2018 midterm election.
The argument against the GOP tax plans is pretty simple: They were thrown together in haste, with minimum debate and no Democratic input, largely to benefit wealthy Americans.
Trump and the GOP lawmakers tell us that reducing corporate taxes would encourage companies to expand operations in the U.S., thereby increasing jobs. That might be true. Why, however, would big companies return jobs to the U.S. when they could continue to employ workers for significantly less in China, India, Pakistan, Bangladesh and a host of other countries, no matter how deeply the federal government cut taxes?
Now, not later, is the time for all of us to speak up and out against these ill-conceived GOP tax plans. It’s time that lawmakers return to the drawing board.