Evan Vucci | AP

President Donald Trump holds an example of what a new tax form may look like during a meeting on tax policy with Republican lawmakers including House Speaker Paul Ryan of Wis., and Chairman of the House Ways and Means Committee Rep. Kevin Brady, R-Texas, right, in the Cabinet Room of the White House, Thursday, Nov. 2, 2017, in Washington.

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By Mark Weiner | mweiner@syracuse.com

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The Republican-controlled Congress is trying to pass the most sweeping overhaul of the U.S. tax code in 30 years, a plan that opponents say will pick winners and losers in states across the nation.

The GOP authors of the Tax Cuts and Jobs Act bill say it will cut rates for most people and businesses, allowing most taxpayers to file their tax returns on a simple form the size of a postcard.

A typical middle-income family of four earning the median household income of $59,000 would receive a $1,182 tax cut under the plan, the bill’s supporters say.

But New York residents would lose all or most of their single most popular tax break, the deduction for state and local income, sales and property taxes, or SALT. The SALT deduction is one of the six original tax deductions dating to the inception of the U.S. Tax Code in 1913.

New York state officials say the loss of the SALT deduction will take away up to $72 billion a year in tax deductions, affecting about 3.4 million state residents who itemize their taxes.

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David Lassman

Why New York state stands out

Democrats and some New York Republicans say the plan is unfair, penalizing the highest-taxed states that depend on the deductions – California, New York, New Jersey and Illinois.

New York taxpayers are second only to California in the total amount claimed as IRS deductions for state and local taxes -- mostly because income and property taxes in the two states are generally higher than the rest of the nation.

An analysis by the Institute on Taxation and Economic Policy found New York taxpayers would be the nation's second biggest loser under the plan, with a net tax increase of $4 billion. California would have the largest next tax increase, about $12.1 billion.

Democrats say the plan will increase taxes for 36 million middle-class households, while giving the biggest benefits to higher-income taxpayers and corporations.

What follows is a closer look at how the tax plan would impact New York.

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J. Scott Applewhite | AP

Lower individual tax rates

Under the GOP plan, the number of federal tax rates would be reduced from seven to four.

Income would be taxed at 12 percent for the first $90,000 earned by all New Yorkers, and 25 percent for those earning more than $90,000 up to $260,000.

The top tax brackets would tax earnings at 35 percent (for those earning $260,000 to $1 million per year) and 39.6 for high-income residents making more than $1 million per year.

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Doubles the standard deduction

All taxpayers who don’t itemize their deductions would be able to claim a standard deduction that nearly doubles – increasing from $6,350 to $12,000 for individuals, and rising from $12,700 to $24,000 for married couples.

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Eliminates deduction for NY income tax

Under both the House and Senate bills, federal taxpayers would no longer be able to deduct what they paid in state income tax and sales tax.

More than 3.4 million New York residents deducted $51.7 billion in state income tax in 2015, according to IRS figures cited by state Comptroller Tom DiNapoli.

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Dennis Nett | dnett@syracuse.com

Limits the NY property tax homeowners can deduct

Under the House bill, homeowners would be able to deduct up to $10,000 per year in property taxes. There’s currently no limit. Under the Senate bill, the property tax deduction would be eliminated entirely.

New Yorkers deducted $20.9 billion in local property taxes in 2015, according to IRS figures

Unlike individual taxpayers, corporations would still be allowed to continue deducting their state and local taxes, including their property taxes.

U.S. Sen. Charles Schumer, D-N.Y., above, who opposes the tax plan, visited the Bayberry neighborhood in Liverpool in February to talk about the potential negative impact on homeowners.

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Getty Images

Eliminates deduction for medical expenses

The House bill eliminates the medical expense deduction most commonly used by Americans with chronic diseases, disabilities, long-term care needs, and high dental expenses.

The bill also would take away the deduction for dependent-care assistance, meaning families could no longer deduct expenses for daycare or care for aging parents.

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Dennis Nett | dnett@syracuse.com

Keeps the deduction for charity contributions

Taxpayers would still be able to deduct the amount of money they donate each year to certified charitable organizations.

The food pantry at Assumption Church in Syracuse, above, is among many in New York that depend on charitable contributions to help feed those in need.

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David Lassman

Expands child tax credits

The existing Child Tax Credit would be increased from $1,000 to $1,600 per child. A new credit of $300 could be claimed for each parent and non-child dependent.

Democrats point out the Child Tax Credit would decline over time, and the $300 per person family credit would be phased out after five years.

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Eliminates the personal exemption

The personal exemption of $4,050 for every taxpayer and dependent listed on a tax return will be eliminated. For a married couple with two children, that takes away a tax break worth a total of $16,200.

Republican authors of the bill say expanded and new child tax credits will help make up for the loss of the personal exemption.

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David Lassman

Decreases the corporate tax rate

The tax rate for businesses would decline from 35 percent to 20 percent, marking the largest reduction in the corporate tax rate in U.S. history. At the same time, most business deductions and credits would be eliminated.

U.S. Rep. John Katko, R-Camillus, is among those who say the lower corporate rate will encourage companies to bring back cash held overseas and invest in expanding their companies in the United States.

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J. Scott Applewhite

Repeals the estate tax

The estate tax, sometimes called the death tax by opponents, would be repealed after six years. In the interim, the amount of money New Yorkers could pass to their heirs tax-free would increase from $5.5 million to $11 million.

According to a 2015 congressional report from the Joint Committee on Taxation, 4,700 estate tax returns reporting tax liability were filed in 2013 out of 2.6 million total deaths in the United States. That means the estate tax affected about 0.2 percent of Americans.

Rep. Tom Reed, R-Corning, above, listens as he sits next to a stack of IRS Code volumes as the House Ways and Means Committee begins the markup process of the GOP's tax overhaul, on Capitol Hill in Washington, Monday, Nov. 6, 2017. Reed supports the plan.

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Rick Moriarty | rmoriarty@syracuse.com

Eliminates tax credits for public housing, historic preservation

The House GOP tax plan eliminates tax-exempt private activity bonds, which generate low-income housing tax credits used for affordable housing developments and preservation in New York.

Without the credits, New York state would lose $4.5 billion in affordable housing financing for more than 17,000 affordable homes per year, according to New York affordable housing advocates.

The federal Historic Tax Credit program has been one of the keys to the restoration of historic buildings across New York, including the Hotel Syracuse project, above. Since its inception, the program has helped preserve 42,293 buildings nationwide, leading to the 2.4 million new jobs.

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Gary Walts

Extra costs for colleges and students

The House GOP bill eliminates the student loan interest deduction. Under existing law, those with student loans can deduct up to $2,500 in interest paid each year on qualifying federal and private student loans.

The House bill also would impose a 1.4 percent excise tax on investment income from college endowments worth at least $250,000 per full-time student, and tax graduate student stipends.

The Senate tax proposal maintains the student loan interest deduction

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Pablo Martinez Monsivais | AP

Senate plan cuts Obamacare mandate

Some of the most vocal opponents are health care providers concerned about the Senate bill’s removal of the individual mandate for healthcare, a crucial underpinning for the Affordable Care Act, or Obamacare.

The nonpartisan Congressional Budget Office estimates that repeal of the mandate will leave about 13 million Americans without healthcare by 2027.

Opponents include the American Academy of Family Physicians, American Hospital Association, American Medical Association, Blue Cross Blue Shield Association and Federation of American Hospitals.

The legislation in the House and Senate carries high political stakes for President Donald Trump and Republican leaders in Congress, who view passage of tax cuts as critical to the GOP's success at the polls next year.

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N. Scott Trimble

New York schools, local governments oppose bill

A coalition representing New York schools, local governments and realtors opposes the GOP tax plan because of the elimination of the state and local deduction.

The coalition includes the New York State Association of Counties and Onondaga County Executive Joanie Mahoney, a Republican.

Other coalition members are the New York State School Boards Association, New York State Conference of Mayors, Association of Towns of the State of New York, and the New York State Association of Realtors.

A broad array of national organizations has come out against the GOP bill. Those include the National Association of Realtors, National Association of Home Builders, National Farmers Union, Sierra Club, and Association of American Universities.

The Fraternal Order of Police, which represents 330,000 law enforcement personnel, said the elimination of the state and local tax deduction could force cutbacks in local police departments that put people at risk.

The anti-deficit group Peter G. Peterson Foundation says the tax plan is an example of fiscal irresponsibility, adding $1.5 trillion to the national debt over the next 10 years.

Syracuse mayoral candidates Howie Hawkins (left), Ben Walsh (right) above protested against the bill Nov. 6, 2017 during a visit by a Trump administration official at the Tech Garden in Syracuse.

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J. Scott Applewhite | AP

Support from national groups

The GOP tax bill is supported by business and industry groups that include the U.S. Chamber of Commerce, National Association of Manufacturers, American Trucking Association, National Retail Federation, Consumer Technology Association, Business Roundtable and National Federation of Independent Businesses.

More than two dozen conservative groups also support the bill, including the National Taxpayers Union, Club for Growth and Americans for Tax Reform.

House Majority Whip Steve Scalise, R-La., above, holds up a proposed postcard-sized tax form as he talks about the GOP agenda for tax reform, during a news conference on Capitol Hill in Washington, Tuesday, Oct. 24, 2017.

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Susan Walsh | AP

More stories about the GOP tax plan and NY

Schumer, Cuomo: GOP tax plan is a lump of coal for NY

Schumer: Trump cabinet member lives in 'tax twilight zone'

Cuomo seeks tax help, appeals to Trump's love for NY

Schumer tries to unite NY House members against GOP tax plan

The $68 billion question: Will Trump, GOP cost NY its most popular tax break?

House bill will eliminate state income tax deduction

Katko: NY, NJ reps ask House leaders to keep property tax deduction

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How Upstate NY members of Congress plan to vote

Rep. John Katko

Rep. Claudia Tenney

Rep. Elise Stefanik

Rep. John Faso

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Contact Mark Weiner anytime: Email | Twitter | Facebook | 571-970-3751