NY May Scrap its Income Tax for a Payroll Tax

January 9, 2018. According to this article, New York may end its income tax and instead expand its payroll tax as a way to outmaneuver the new federal law that limits deductions for state and local taxes. Gov. Andrew Cuomo said Wednesday during his State of the State address that he is exploring how to make the complicated switch, joining other high-tax states in considering how to protect residents’ tax deductions and state revenue. California and New Jersey leaders have also discussed similar steps, such as programs to allow people to pay charitable contributions to their state governments, rather than pay income taxes.

“Any plan would need to ensure lower- and middle-income New Yorkers aren’t hurt, said Ron Deutsch, executive director of the Fiscal Policy Institute, a labor-backed group in Albany. “Looking at the swap between payroll and income taxes is interesting.” Deutsch said. “But it is potentially fraught with some pitfalls that would need to be addressed. We would need to make sure it is fair and equitable.”

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Filed in: 2018, FPI, NYS budget