Gov. Andrew Cuomo bristled at the Trump Administration's plan for a $100-billion tax cut, which he charges would chiefly benefit the nation's wealthiest 1%.

NEW YORK CITY—New York Gov. Andrew Cuomo has vowed to propose legislation to “decouple” state tax policy from the federal tax code if the Trump Administration follows through on a plan to enact a $100-billion capital gains tax cut.

Gov. Cuomo also called on Congress to block the capital gains tax cut proposal that he said would only benefit the nation's wealthiest 1% in violation of the US Constitution. President Trump recently asked the U.S. Department of Treasury to study unilaterally slashing capital gains taxes by adjusting the levy for inflation, which would lead to approximately $100 billion in tax cuts over the next 10 years.

The governor, at a press conference on Thursday, said the State Department of Tax and Finance estimates the capital gains tax cut, if implemented, would reduce New York State tax revenues by up to $500 million annually.

“After running on a scam platform of fighting for the middle-class, President Trump is again firing a missile at the heart of our working and middle-class New Yorkers,” Gov. Cuomo said. “I call on Congress to block any illegal attempt by President Trump to enrich his friends at the expense of the American people. If the President moves forward with his $100-billion tax cut for the rich, I will propose legislation to decouple our state's tax code and ensure New York remains true to its values as a progressive beacon for the world.”

Because of the way the state tax code's definition of capital gains is coupled with the federal tax code, New York would automatically also adjust capital gains for inflation—delivering an additional tax cut to those eligible state residents, the governor explained. Decoupling the state definition of capital gains from the federal tax code will ensure that those New York eligible taxpayers will not receive the same benefit in terms of state taxes.

Gov. Cuomo's reaction to the Trump tax cut plan follows New York's recent legal action against the federal tax reform law that imposes a $10,000 SALT (state and local tax) cap.

In April, the governor signed legislation to provide new options for charitable contributions and create a new Employer Compensation Expense Program that allows employers to help their employees preserve deductibility of wage income. In July, New York State charged in its lawsuit against the federal government that the SALT cap was enacted to target New York and similarly situated states, that it interferes with states' rights to make their own fiscal decisions and that the cap will disproportionately harm taxpayers in these states.

The states of New Jersey, Connecticut and Maryland joined New York in the suit against the SALT cap.

Instant Insights /

Cuomo: Trump's Capital Gains Tax Cut Would Cost NY $500M

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