January 3, 2018

NEW YORK & CO. ARE PAYING THE PRICE FOR BEING DEEP BLUE:

The cold wasn’t the only thing that hammered the Northeast in the final fortnight of 2017 — and we can thank our extreme political polarization for the traumas we New Yorkers and New Jerseyans are about to suffer.

On the last night of the year, the Trump administration informed New York and New Jersey that there was no longer a deal with the federal government to help fund the desperately needed new rail tunnel between the two states — a $13 billion hit.

Before that came the signing of the tax bill, whose limitations on the mortgage-interest and state- and local-tax deductions (SALT) are going to hammer upper-middle-class residents in these states and send real-estate values into a downward spiral.

We can argue about the merits of these decisions. Does the unquestionable NY-NJ commuter crisis have a national component obliging the federal government to take an active role? There are strong arguments on both sides.

Read the whole thing.

Related: “California Democrats are toying with a brash scheme to skirt a new federal cap on state and local tax deductions: Instead of paying taxes to the Golden State, Californians would be allowed to donate the money to the state’s coffers — and deduct the entire sum from their federal taxes.”