The Business Council of New York, which has long pressed for corporate tax reform, asked members of New York’s delegation to press for the restoration of the full state and local tax deduction. | Gage Skidmore Tax reform bill splinters New York's GOP delegation

New York's nine Republican House members are divided over the $1.51 trillion tax reform plan that the GOP leadership unveiled in Washington on Thursday. The plan places a cap on the deductibility of property taxes, a high cost item in the state, particularly in the suburbs of New York City, and it eliminates the deductibility of state and local incomes taxes.

The GOP House members from Long Island, Lee Zeldin and Peter King, both said they will oppose the plan if it remains in its current form.


Two other members of the delegation, Chris Collins and Tom Reed, signaled their support for the package. Collins and Reed were the only two members of the delegation who voted in favor of a budget resolution last week that paved the way for Thursday’s tax reform package.

The remaining five New York Republicans did not indicate definitively whether they would support the plan, which will be championed by House Speaker Paul Ryan.

Zeldin was the first member of the delegation to say he would oppose the bill after text was released Thursday morning. He criticized the scale-back of the so-called SALT deduction, which overwhelmingly benefits high-tax states like New York and California. The compromise on property taxes, which would allow deductibility up to $10,000, is insufficient, he said.

“I am a 'No' to this bill in its current form,” Zeldin said in a statement. “We need to fix this State and Local Tax deduction issue. Adding back in the property tax deduction up to $10,000 is progress, but not enough progress. If I’m not fighting for New Yorkers, I can't expect anyone else from another state to do it for me.”

King, the dean of the GOP's delegation, echoed Zeldin's opposition. “The current version I would have to oppose because it caps the property tax deduction and takes away the state income tax deduction altogether,” King said in a phone call with POLITICO. “That really hurts my district and also New York State overall."

The 429-page bill — accompanied by an 82-page summary — has been shrouded in secrecy in an attempt to keep lobbyists and scores of interest groups at bay. President Donald Trump has called for passage by the end of the year, a monumental lift for lawmakers who must also contend with a log jam of other must-pass legislation.

The loss of the deductibility of state and local income taxes will hit New York particularly hard. Gov. Andrew Cuomo's office estimates New Yorkers save $12.1 billion annually by deducting state and local taxes (mostly income taxes) and $5.2 billion by deducting property taxes. Roughly 3.3 million New Yorkers take some form of those deductions each year.

Dan Donovan, exiting a tax briefing in Washington, said he needed to do more analysis of the proposal and would reserve judgment until he saw the legislation.

“We’ll analyze the entire bill when it comes out,” he said.

“If you pick it apart, and look at one thing, one thing could look great and then the elimination of other things might diminish that,” he added. “Or some things might look bad but when you see the other benefits, it might be a net benefit.”

John Faso, John Katko, Claudia Tenney and Elise Stefanik each stated the bill was a good start but needs improvement, and would not say which way they’d vote in its current form.

“Anyone who dismisses this bill outright should be prepared to ... detail why hardworking Americans should continue to be taxed at excessive rates,” Katko said in a statement. "No bill is perfect, which is why we need to keep this process moving forward.”

But King doesn't think the bill will be changed, unless it doesn't have the votes to pass. “This seems to the final version that the House supports.”

Reed, said he supported the measure because it would amount to an estimated $1,600 saving for a family of four in his Southern Tier district. A previous POLITICO analysis of tax data also showed his district is also less affected by a change in SALT and property tax deductibility compared with those downstate.

Collins has become a close congressional ally of the White House due to his early support of Trump’s presidential candidacy, and has reveled in needling Cuomo, who has frequently decried actions on the federal level that affect New York.

“Passing comprehensive tax reform will be one of the most important accomplishments we will see under President Trump,” Collins said in a statement. “Making America more competitive on the world stage will truly make America Great Again and allow more Americans to achieve the American Dream.”

The legislation also includes a new provision to lower the cap on mortgage interest deduction from its current level of $1 million to $500,000. Current homeowners would be allowed to keep the deduction at its current level — the cap would only apply to future home purchases.

“Our initial read of the House tax proposal released today is that it will harm many New York homeowners,” New York State Association of Realtors CEO Duncan MacKenzie said in a statement.

Westchester County Executive Rob Astorino, a Republican who represents a county with some of the nation’s highest property taxes, announced his opposition almost instantaneously.

“Call it as I see it: GOP House tax bill stinks 4 Westchester’s middle class. Kill it, give NY real tax relief 2 create jobs & grow economy!” he tweeted Thursday morning.

"Taxes are already too high in New York State, and any attempt to limit or eliminate state and local tax deductions will especially hurt the middle class," he added in a statement. "We need real property and income tax relief to create jobs and grow the economy."

Cuomo called the plan “diabolical,” telling reporters it constituted “a tax on your taxes. This from a party that says they want to cut your tax." He said the SALT changes were especially pernicious.

“It affects New York, it affects California, it affects 12 states,” he said. “All 12 states happen to be states so-called blue states, and that I’m [not] going to succumb to the conspiracy theory but it’s a heck of a coincidence.”

House Republicans including Majority Leader Kevin McCarthy of California, view the tax break as a subsidy for Democratic-run states that overtax their constituents.

Other changes include the elimination of itemized deduction for medical expenses, which could burden households with high medical costs, and the imposition of a 1.4 percent tax on private university endowments, a move that well-heeled and connected schools will surely fight.

The Business Council of New York, which has long pressed for corporate tax reform, asked members of New York’s delegation to press for the restoration of the full state and local tax deduction.

“While we appreciate that the current bill recognizes the importance of retaining the federal deduction for real property taxes, we urge our House and Senate members to continue to push for retention of the full State and Local Tax deduction,” Business Council president Heather Briccetti said in a statement.

John Banks, president of the Real Estate Board of New York, echoed that sentiment.

“We remain very concerned about the proposed elimination of state and local tax deductibility,” he said. “It is not only unfair, but would have a negative impact on middle class taxpayers as well as state and local governments across the country.”

If this bill passes as currently constructed, King wondered why New Yorkers would continue to donate to Congressional Republicans.

“Republicans come to New York to raise their money," King said. "They come to Manhattan and come to the Hamptons. It’s where they have their biggest fundraising events. How can you be expecting the people who make the contributions to continue making them when they are going to get hurt by this bill?”

Gloria Pazmino, Marie J. French and Sally Goldenberg contributed to this report.