New York state would end income taxes on wage earners and make up the revenue with an employer payroll tax that’s federally deductible as part of a restructuring plan that Governor Andrew Cuomo is recommending to mitigate harmful effects of the new U.S. tax code.
Businesses—especially smaller firms—may scale back on treating clients to major league baseball games, golf outings and the like after Congress and President Donald Trump ended a tax break for such entertainment.
In liberal bastions like metro New York and California, the Trump tax overhaul has been criticized as economic warfare. But as elements of the plan come into focus, tax experts are concluding that some of the most dire predictions for high-tax blue states—particularly surrounding the treatment of state and local taxes—may not pan out as feared.
New Jersey’s governor-elect joined a chorus of leaders in Democratic states who are proposing workarounds for their residents to avoid new caps on state and local tax deductions—even as a top Trump administration official suggested the federal government might act to limit such strategies.
The Trump administration may try to block potential plans by high-tax states including New York and California to shield residents from state and local tax break changes, according to White House economic adviser Gary Cohn.
Washington, D.C.’s city government collected more than $50 million in prepayments of 2018 property taxes from about 7,500 taxpayers, said David Umansky, a spokesman for the city’s Chief Financial Officer Jeffrey S. DeWitt.
Before the ink was dry on the Republican tax bill signed into law late last month, experts predicted that state governments would try to shield their residents from tax hikes they’ll suffer from a sharp reduction in state and local deductions.