Trump Plans To Ditch Big Tax Break That Saves Long Island Homeowners Thousands

It's official: President Trump wants to ditch that big federal income tax break you get every year.

As part of a much-awaited reform package, the Trump administration announced Wednesday that it plans to dump the federal property tax deduction for state and local taxes that benefits New Yorkers.

While the plan could help residents in states that don't have high income or property taxes, Rep. Peter King told Fox Business News this plan could have a “unique hit on Long Island."

• Related: Property Tax Rates On Long Island

During a press conference on Wednesday, Treasury Secretary Steven Mnuchin said the Trump administration plans to eliminate all tax deductions other than mortgage interest and charitable deductions.

"We think that will be sweeping reform," Mnuchin said during the press conference (see his comments below, beginning at 10:40).

Mnuchin and Gary Cohn, chief economic adviser to Trump and director of the National Economic Council, said the financial hit property owners would take would be offset by economic growth and an overall tax cut.

Trump's plan would cut the tax rate paid by businesses to 15 percent. The number of individual income tax brackets would be reduced from seven to three, which would likely lead to a tax cut for people across the board. Trump also wants to double the standard deduction, meaning people who do not own homes may see a decent tax break.

"Our basic premise here is to simplify the tax system and lower rates," Cohn said. "We don't want to penalize people. We want to make the system very fair."

But critics see the plan as a giveaway to corporations and a tax cut that will likely benefit the rich while removing a deduction that New York property owners have come to depend on.

Fox reports that a study from the Tax Policy Center says that ditching the property tax deduction for state and local taxes would cost about 27 percent of New Yorker homeowners an extra $4,250 in their federal bills.

One of the most popular deductions in New York, which claims $68 million per year, would be eliminated, Newsday reports. The plan would no longer allow taxpayers who itemize their returns to deduct the amount paid in local and state taxes from their federal taxes, according to the publication.

A report by RealtyTrac shows that Nassau and Suffolk continues to have one of the highest average property tax bills in the country.

• Related: Property Tax Rates On Long Island

According to the report, the average annual property tax for Nassau homes was $11,232 with an average market value $587,532 and a tax rate of 1.91 percent. Average property taxes for Suffolk homes came in less at $9,333 with an average market value of $469,877 and a tax rate of 1.99 percent.

Fox reports that King said he supports the GOP eliminating tax breaks and cutting rates, but doesn’t approve of his constituents losing the ability to take away $12,000 annual tax bills from their federal income.

Rep. Lee Zeldin (R-Shirley) told Newsday he was against the elimination of local and state tax deductions.

“It’s imperative that our local residents aren’t subject to double and triple taxation and retain the ability to deduct local taxes and reduce their federal tax bill,” he said in a statement to Newsday.

Sen. Chuck Schumer said that Trump’s priorities are to give tax breaks to the wealthy. Schumer said the breaks would be break "devastating for middle-class families in New York and elsewhere," Fox Reports.

Reporting by Tom Davis

Photo: WH.gov, Gary Cohn and Steve Mnuchin