Governors of N.Y., Pa. Clash on Tax Reform

The governors of two of the largest states, Mario M. Cuomo of New York and Dick Thornburgh of Pennsylvania, clashed before Congress today over the most sensitive part of President Reagan’s tax reform plan--dropping the deduction for state and local taxes.

In testimony to the House Ways and Means Committee, Thornburgh, a Republican, repeated the Administration position that keeping the deduction means that “the average citizen in the 34 lower-tax states ends up subsidizing high-income taxpayers in higher tax states. They need no such subsidization.

“The choice is simple: either to continue a tax break, which benefits only one-third of all taxpayers . . . or to provide lower tax rates for all taxpayers in all states,” Thornburgh added. Pennsylvania is a relatively low-tax state.

Cuomo, a Democrat whose state would be hurt the most by dropping the deduction, argued in his prepared testimony that eliminating the tax break “overturns a central idea at the heart of our republic--that we are one nation, not 50 nations, and that we are strongest when we stand together and help each other.”

‘Sounds Plausible, but . . .’

“The governor of Pennsylvania recently said that his state should not subsidize my state,” added Cuomo, an outspoken critic of the President’s plan. “It sounds plausible. But think about it.

“Is it right New Yorkers help pay federal disaster assistance so that people of Albion, Pa., can begin rebuilding their lives after a tornado struck there?” Cuomo asked.

“Of course it is. In our federal system, the controlling idea is that we’re all stronger when each part of the republic is able to meet its needs,” Cuomo said.