The Biden administration has rightly proposed a massive $1.7 trillion infrastructure bill, dubbed the American Jobs Plan, to repair and restore our crumbling airports, roads, bridges, tunnels and train trestles, and to fund projects ranging from increasing broadband connectivity in rural America to cleaning up polluted drinking-water supplies.
The U.S. is the wealthiest nation on earth when measured by economic output, yet we rank 13th in the world in the quality of our infrastructure. That’s unacceptable.
Republican senators are at least starting to talk about infrastructure improvement. Last week they proposed their own $928 billion plan, giving us a modicum of hope that a bill might eventually see the light of day.
That’s a good thing. Congress and the president, however, must first fix the cap on deductions for state and local taxes that was implemented under former President Trump in the 2017 Tax Cuts and Jobs Act. The act was anything but a tax cut for tens of thousands of already tax-burdened Long Islanders.
The Island has among the highest property taxes in the country. We are known as a “high-tax region.” Before 2017, Long Islanders could at least deduct their state and local taxes, including their property taxes, on their federal income tax returns, annually saving them at least a couple of thousand dollars, if not more.
It was only right. New York sends more in federal tax dollars to Washington than any other state in the nation, while receiving significantly less than most other states in federal aid. We deserved at least a minor tax break.
Trump’s 2017 act, however, limited the SALT deduction to $10,000, effectively forcing many property owners to take the standard deduction of only $12,000 for single people and $24,000 for married couples, costing them tens of thousands in deductions and raising their federal income taxes by thousands.
Biden proposes paying for his infrastructure bill by raising the corporate tax rate. Limiting the SALT deduction, though, was a key component of Trump’s plan to reduce the corporate rate.
If Biden doesn’t first fix the SALT deduction before moving ahead with infrastructure, then high-tax regions like Long Island will effectively pay more than their fair share of the infrastructure bill.
An infrastructure bill would benefit all of America. Each of us should be expected to pay our share, and not more.
According to the Rockefeller Institute of Government, total economic activity lost in New York because of the SALT cap ranges from $14.4 billion to $24.5 billion annually. That’s just plain wrong.
U.S. Rep. Tom Suozzi, a North Shore Democrat, and Rep. Andrew Garbarino, a South Shore Republican, are among those leading the charge to repeal the SALT cap as part of the House of Representatives’ recently formed SALT Caucus. Biden would be wise to listen carefully to caucus members, lest he risk losing the suburban support that helped catapult him to the White House.