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For New York Commuter Hubs, Tax Plan Threatens Trickle-Down Pain

  • Tax bases may decline and opposition to increases may grow
  • Cuomo says it’s "political retaliation through the tax code"
A home in Greenwich, Connecticut.
Photographer: Michael Nagle/Bloomberg

In New York City’s pricey suburbs, it’s not just residents who will be squeezed by higher tax bills because of the Republican overhaul racing through Congress. Their towns may feel it, too.

The proposed rollbacks to deductions for state and local taxes, property taxes and mortgage interest may make it harder for residents of commuter hubs in New York, New Jersey and Connecticut to sell homes and lead more to challenge their real-estate tax assessments, potentially weakening local governments’ biggest source of revenue, according to S&P Global Ratings. And political opposition to tax increases may rise, since those liabilities could no longer be used to drive down what’s owed to the federal government.