President Trump listened to New York Gov. Andrew Cuomo complain Tuesday about a provision in the GOP tax overhaul that’s walloping higher earners in the Empire State, the White House said, but the president feels the Democratic governor should consider slashing state taxes as a path to relief.
Blue states like Mr. Cuomo’s still aren’t happy with a $10,000 limit — known as the SALT cap — the Republican tax bill imposed on the amount of state and local taxes filers can deduct from their federal tax bill.
The federal deduction tends to be more relevant to higher-tax states like New York and New Jersey, where upper-income earners are more likely to take advantage of writing the taxes off on their federal returns.
Mr. Trump heard the governor out in a private meeting at the White House, though said GOP reforms are a net benefit to the U.S. economy while places like New York need to change course.
“The president reiterated the negative impact that high taxes in states like New York have on hardworking families and job creators,” said Deputy White House Press Secretary Judd Deere.
Mr. Trump then pivoted to job-creating opportunities for New York, such as fracking and infrastructure improvements. But the governor stood by his position.
“I told the president myself today: SALT repeal is hurting us. And if you hurt New York, you’re harming the economic engine of the nation,” Mr. Cuomo tweeted.
Mr. Cuomo’s tête-à-tête with Mr. Trump comes one week after the president used his State of the Union Address to slam a late-term abortion bill in New York that, in Mr. Trump’s words, would “would allow a baby to be ripped from the mother’s womb moments before birth.”
“The president raised his concerns to Governor Cuomo about Democrats’ support of late-term abortions,” Mr. Deere said.
The SALT issue, however, was the main reason for Mr. Cuomo’s visit.
Liberal leaders in high-tax states have urged the president to make changes, saying the Republican overhaul tilted the tax structure in favor of red states.
The limit has also been a thorn in the side of Northeast Republicans. The dozen House Republicans who voted against their party’s tax bill in 2017 mainly cited the SALT cap.
Sen. Robert Menendez and other New Jersey Democrats introduced a bill on Monday that would erase the cap.
“Allowing property taxes to be fully deducted has been a bedrock principle of our tax code and is commonsense tax policy that rewards states that invest in things like education, public safety, infrastructure and economic opportunity for all,” Mr. Menendez said.
Yet Senate Finance Committee Chairman Charles E. Grassley says he has no interest in revisiting the issue.
Like the president, the Iowa Republican has said that blue states should rein in their own behavior.
“The SALT deduction is a federal subsidy for states to raise taxes on their residents without political consequence,” committee spokesman Michael Zona said. “The answer to the problem is for states to lower their taxes instead of insisting that taxpayers from lower-tax states subsidize their profligate spending.”