The Southern Tier’s Congressman, Tom Reed, was one of just two New York Republicans in the House of Representatives to vote for a federal budget that would drastically cut taxes for America’s richest citizens, critics have claimed.
Reed, a member of the House Ways And Means Committee and one of New York’s nine Republican representatives in Congress, was joined only by Western New York representative Chris Collins in contributing to a 216-212 vote to approve the budget. New York’s other seven Republican representatives each voted against the measure, part of a block of 20 Republican members of the house from states with high local tax burdens who have resisted plans to eliminate or scale back income-tax deductions for state and local taxes.
Reed, in contrast, has supported this effort: A week ago, Reed also voted to eliminate the State and Local Tax deduction which, in 2015, was utilized by 40 percent of taxpayers making between $50,000 and $75,000. In a visit to Ontario County earlier this week, New York Senator Chuck Schumer, a Democrat, called the move a “dagger pointed to the heart of the middle class.” Governor Andrew Cuomo, who met with President Donald Trump in January, called the prospect of the cuts “devastating” to states like New York at the time.
Reed, who as a member of the Ways and Means Committee plays a critical role in the formation of tax policy, stood by his vote as a stepping stone to an ambitious overhaul of the federal tax code. Under a plan proposed by President Trump, the number of tax brackets in the current system would be reduced from seven to three, with tax rates of 12 percent, 25 percent and 35 percent. This would result in a reduction from the current top rate of 39.6 percent for America’s highest earner and an increase for America’s poorest, from the lowest rate of 10 percent.
"This budget is a critical step towards making reforms to our broken and outdated tax code,” said Reed in a statement. “We have a once in a generation opportunity to make positive changes that will mean more money for hard working folks and spark our economy. The American people want and deserve a simpler, fairer tax structure. The time for tax reform is now, so let’s get to it."
Under the federal budget that has passed, many have argued that the national deficit will increase, particularly due to a number of Americans retiring and going onto social security and programs like Medicare. Meanwhile, Republicans have argued tax cuts will spur economic development and increase investment and incentive for companies to stay in the United States, bolstering job growth and making up for the lack of revenues projected under their plan.
Critics of the vote have argued that the 2018 federal budget – and its substantial tax cuts – will have numerous negative impacts on the middle class. According to an analysis released by Governor Cuomo’s office last month, the loss of the SALT Deduction would result in 3.3 million New York taxpayers seeing their federal income tax liability increase by $17.5 billion, leading to an average increase of $5,300 more in federal income taxes on the typical tax bill. (Those making less that $50,000 per year, on average, would see an uptick of about $423 in their federal taxes according to the analysis.)
After the vote on Thursday, NYS Comptroller Tom Dinapoli's office released a report stating that under the Trump budget, New York State taxpayers could lose more than $72 billion in reported deductions for income and property taxes if proposals to change the federal tax code are implemented. At the county level, taxpayers in Tompkins reported an average of $14,783 in these deductions each year, according to the report.
Further reductions in the federal budget could be ahead: An additional provision in the budget legislation also authorizes procedures to allow Republicans to reduce federal revenues by as much as $1.5 trillion over the coming decade without help from the Democratic party.
“With this budget, Representative Reed is officially on the record supporting a middle-class tax increase – something he must explain to families and older Americans in the Southern Tier who will have less money in their pocket,” said Evan Lukaske, a spokesman for the Democratic Congressional Campaign Committee. “Particularly shocking is that this budget slashes the State and Local Tax deduction, which families rely on in the Southern Tier for thousands of dollars in their pockets each year. It’s clear as day that Reed is looking out for big corporations and the wealthiest in our country, not the people that sent him to Washington.”
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