GOP Rep. Peter King said the Republican-backed tax reform plan that passed the House will have a “damaging” effect on the state because it eliminates deductions for local and state taxes and is being done at the “expense of New York and New Jersey.”
King, of Long Island, said he wanted to vote for the tax plan to cut corporate taxes and give the middle class some relief but couldn’t because of its dire consequences for New York.
“It will have damaging effect on the overall economy and also on individuals. It’s a terrible thing,” he told John Catsimatidis on AM970’s “The Answer” in an interview that aired Sunday.
The Republican-controlled House approved the tax reform plan by a 227-205 margin last week.
Thirteen Republicans — including King — from high-tax states like New York, New Jersey and California joined with Democrats to oppose the plan.
King said deductions included in the reform measure will not be enough to “offset the loss in real estate and state income tax deductions.”
“On balance, states outside of New York, New Jersey and California — many of their taxpayers will get a benefit — but it’s done at the expense of New York and New Jersey,” King said.
Responding to critics like White House budget director Mick Mulvaney who said he doesn’t “think it’s up to the federal government to save New York from its bad decisions,” King said the Empire State will always have a higher tax burden because it contributes more to Washington than other states.
“The main reason is New York is a donor state. We give far more to Washington then we get back. For every dollar we give, we get $.79 back. That’s a $48 billion shortfall,” King said.
“Now, you take South Carolina. For every dollar they give they get about $1.70 back. … South Carolina, a much smaller state, gets a surplus of $23 billion. So that’s one of the reasons why New York has so many financial issues because we pay so much to Washington that we never get back.”
King also said it’s an opportunity for Republican states like South Carolina, which Mulvaney used to represent in the House, to take punish D emocratic states like New York and California.
“Mick Mulvaney, the budget director, he’s from South Carolina. And he started in with that the other day when a New York reporter asked him about it, and he basically started attacking New Yo rk, not mentioning the fact that his state gets back almost 100 percent more from the federal government.”
“So it’s an opportunity — there’s a lot of available money in New York, they can grab and it ends up giving a tax cut to many of the red states,” he added.