The deduction previously was unlimited.
The study will assess the effect of legalization in MA and Vermont - which voted to legalize it last month and will make it legal from July this year - as well as New Jersey if and when it passes, and see what the impact would be on NY. The proposal would shift some or all of the state income tax liability of employees for whom federal deductibility of state and local taxes is capped to a payroll tax. The payroll tax would only apply to wage earners.
A municipal government, which derives operational funds from the taxes it levies on residents, would have to raise its own taxes to cover the payroll taxes to the state.
Gov. Cuomo's announcement comes just one day after Republican gubernatorial candidate and former Erie County executive Joel Giambra announced he wants to see marijuana decriminalized and would use the revenue to pay for state infrastructure projects, if elected. He spoke last among the parade of more than 15 politicians in Harlem, more than two hours after Cuomo.
Part of the problem relates to the progressivity of New York's existing income taxes, which would have to be considered in such a change. Mike Durant, state director of the NFIB, said Cuomo's plan is "complicated and potentially unworkable".
"The various alternative tax options all highlight how complicated and hard to implement they would be", said E.J. McMahon of the fiscally conservative Empire Center think tank.
New York, with almost 20 million people, is the fourth largest USA state.
A source close to Giambra said, "Adult use of marijuana can produce revenue for the state that can rebuild the Metropolitan Transportation Authority (MTA) and our roads and bridges throughout the state".
"The concept of a payroll tax is very challenging", Flanagan said. "Some sole proprietors and partnerships would be heavily incentivized to incorporate to achieve the tax savings".
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He would have some demographic advantages in a Democratic primary where an enormous number of votes come from New York City and minority communities, the Times said.
Cuomo said offsetting the loss of the property tax deduction would be more hard.
The end-runs being proposed in Albany would affect taxpayers who itemize on their federal tax forms, which previous year amounted to about one-third of New York's tax filers. Would it be feasible and cost-effective for a municipal government to do that?
Challenging Hochul "is to challenge the governor's administration", said Charlie King, who ran for lieutenant governor with Cuomo in 2002, and who is now an informal adviser to the governor, according to the Times.
A separate proposal would do away with the income tax and instead offer a credit to employers. "How would this work in a collective bargaining situation where wages are prescribed by union agreements?"
He proposes the NYS Department of Health work with State Police and other agencies to study how a regulated pot program would work.
New York State Republican Party Chairman Edward Cox took sharp aim at Cuomo.
The other major plan seeks to reduce New York's reliance on state income taxes, which the report Wednesday said totaled $47.6 billion in the 2017 fiscal year.