Governor Andrew Cuomo’s 2019 Fiscal Year budget is one he describes as the “most challenging.” Cuomo calls it less a budget than an “economic transformation plan” that has to close a $4.4 billion deficit and a $2 billion cut in federal aid under the Trump Administration.
Cuomo says the cap on state and local tax deductions will cost New York homeowners about 25 percent more in federal taxes, affecting all parts of the state. He says it will set back Upstate economic development and needs to be addressed by restructuring New York’s tax code.
Cuomo says he’ll start with a tax reform act changing from an employee-paid income tax to an employer-paid payroll tax. He says it’s a dramatic shift but will thwart what the federal government tried to do with loss of deductibility. Cuomo says that way, employees pay no income tax, and the employer pays a tax which is deductible from his federal tax liability and he gets the money back.
This would apply only to higher income wage earners and will be complicated, but Cuomo says it short circuits a tax increase on most New Yorkers.