Mar 5, 2009 7:24 pm US/Eastern
Loyal Subject Schumer Questions Obama Tax Plan
New York Senator Has Been Staunch Supporter Of New President, But Has Problem With $250,000 Threshold
NEW YORK (CBS) ―
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New York Sen. Charles Schumer has some advice for President Barack Obama: Change your tax plan.
AP
Talking taxes.
Strong opposition from Democrats could force President Barack Obama to change his plan to raise taxes for some Americans.
Even President Obama's most loyal supporters want his tax plan changed.
"I hope the White House will look carefully and modify its proposal in certain areas," Sen. Charles Schumer said.
The problem is that the White House wants to cap deductions -- everything from state and local taxes and mortgage interest to charitable contributions -- for families earning $250,000 or more, which affects a lot more people in the tri-state area than the rest of the country.
"Maybe what they ought to do is sort of scale the rate so based on cost of living if your tax goes up at $250,000 in Arkansas maybe it should go up starting at $500,000 in New York," Schumer said.
CPA David Lifson said Obama's plan seems to ignore the states that showed him the most support when he was trying to get elected.
"The Obama plan surprisingly favors Texas and Florida, where there are much lower income taxes on their citizens, and disfavors California and New York, which is the bedrock of his support," Lifson said.
However, Lifson said there is a way around that.
"I believe there should be a total deduction of state and local taxes before the government thinks about taxing what's left," Lifson said.
New Yorkers have strong reservations about the White House plan.
"They're hitting people with high incomes real hard at a time when we need more money in the system and tax cuts might be the better way or at least holding the tax line where it is," said Robert Leonard of Ardsley.
"I can't really get a sense of security out of the proposals and the environment," said Barbara Flaherty of Lynbrook. "It's just … it's just a very stressful time."
"No question New York is getting the short end of the stick because like you say it costs more to live here. Our salaries are propositionally higher," said Charlie Moran of Massapequa.
The debate on federal tax policy is expected to go on for months. The federal budget isn't due until Oct. 1. Some say that the resistance in Congress to the income tax changes could mean broader troubles for the rest of the president's tax hikes.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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