In 2017, President Trump and a Republican-controlled Congress passed the Tax Cuts and Jobs Act. It was supposed to supercharge the economy, bringing new manufacturing jobs to hard-hit areas, and no doubt, it brought some success. Job gains weren’t higher than they were during the Obama administration, but there were steady gains — until there weren’t.
The latest unemployment figures, released by the federal Bureau of Labor Statistics, are from March 6 — when unemployment stood at 3.5 percent — but we know that figure is sure to rise as millions of Americans are forced out of work because of the coronavirus and will file jobless claims.
The unemployment rate is only expected to increase. People will need relief.
At press time, Congress was debating a nearly $2 trillion relief package that, when passed, was expected to put somewhere between $1,000 and $2,000 in each American’s hands. The measure should provide a desperately needed shot in the arm to a national economy that is fast seizing up. On Long Island, however, it’s hardly enough.
In high-tax regions like New York and California, the weight of the Tax Cuts and Jobs Act was already causing enormous fiscal strain for many homeowners, who lost all but $10,000 of the federal deduction for state and local taxes, known commonly as the SALT deduction.
Loss of that single deduction in high-tax regions has cost people thousands of dollars. Many Long Island taxpayers reported that their federal tax bills rose $3,000, $5,000, $8,000 or more last year. Those bills are not expected to abate this year, unless Congress acts.
It should immediately reinstate the SALT deduction. People here will certainly take $1,000 or $2,000, but restoring the deduction would do far more for many homeowners who are suffering because of the coronavirus.
Most homeowners accepted higher taxes because they believed the Tax Cuts and Jobs Act was boosting the economy — and thus their 401(k) plans. Last week we saw the foolishness of Trump’s tradeoff, as the stock market tumbled and those 401(k)’s sank to the level they were when Trump took office. That is, all of the stock market gains realized over the past three-plus years were erased just like that. Now many Long Islanders are stuck with oversized tax bills.
The time to act intelligently has come. Give the SALT deduction back — now, not later.