The Republican effort to overhaul the nation’s tax system unfairly penalizes high-tax states as well as could negatively impact the nation’s economy, Gov. Dannel Malloy, D-Conn., told CNBC on Friday.
The bills passed by the House as well as Senate significantly curb state as well as local tax deductions (SALT), which would likely leave taxpayers in high-tax states shouldering a higher burden.
“This particular is usually tough. I’m worried about in which on a long-term basis, not only for my state yet for our national economy,” Malloy said in an interview with “Power Lunch.”
For one, the alterations will cause home values to drop in those states, many of which have high populations, he said.
“You see a 10 percent decline in … the value of homes, in which in our country by definition is usually a recession. is usually This particular what they actually want to do?”
Both the House as well as Senate legislation cap property tax deductions at $10,000, yet what will wind up from the final style is usually unclear. The House as well as the Senate are currently working on reconciling their two bills.
Dozens of lawmakers via high-tax states are pushing for more generous local as well as state deductions.
Those who support eliminating or curbing SALT deductions believe in which the alterations could push those states to lower their local taxes. However, Malloy defended the states’ rights to decide how to spend their money as well as pointed out in which those states pay more taxes to the federal government.
“We are a giving state. Almost every SALT state is usually a giving state. as well as who are we giving to? We are giving to states in which aren’t having a net contribution to the federal budget,” he said.
Malloy also argued in which the high state as well as local taxes go toward things like subways in brand new York as well as an extensive train system in brand new Jersey.
“You don’t pay for those systems as well as all of a sudden your economy within those areas as well as the contribution they make to the federal government declines substantially,” Malloy said.
White House economic advisor Gary Cohn told CNBC on Friday in which Republicans are working on appeasing the lawmakers via those high-tax states.
“They have to have a solution in which allows their residents to come away via This particular in a position in which allows those members to support This particular. We’re cognizant of those issues. No one wants to see tax increases. in which’s not what we’re trying to do,” Cohn said.
— CNBC’s Jacob Pramuk contributed to This particular report.