Gov. Andrew Cuomo wants to help New Yorkers avoid federal taxes.
That was one of the core messages of the Democrat's State of the State address Wednesday, where he reprised his earlier promise to sue to stop the new GOP-backed tax law's repeal of state and local deductions — but also indicated he might look to radically transform Albany's entire revenue-generating system. The state and local tax write-offs have cushioned wealthy and upper-middle-income residents in high-excise states such as New York and California from paying taxes twice on the same income, but the tax reform bill President Donald Trump signed in December ended that provision.
Mr. Cuomo reiterated that he believed this "double taxation" was unconstitutional, but announced his administration was exploring shifting away from a state income tax to a combination of other measures.
"Washington has shot an arrow into New York's economic heart," he said in his speech at the Empire State Plaza Convention Center. "The best plan is to get out of the way before it hits."
The governor laid out three mechanisms New York could substitute for its income tax in order to spare its residents: a payroll tax on wages and salaries, a tax on carried interest paid to investment managers, and new charitable entities that wealthy people could donate money to that could be written off on their federal returns.
"We are exploring the feasibility of a major shift. Different states have different tax structures," he said. "We are developing a plan to restructure our tax code to reduce reliance on our current income tax system."
"Cuomo suggests shifting away from state income tax, will ‘explore’ carried-interest taxes" originally appeared on Crain's New York Business, a sister publication of Pensions & Investments.