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Attorneys General of New York, Connecticut, Maryland and New Jersey brought a lawsuit against the Trump administration challenging the constitutionality of the new federal deduction limit for national and local taxes at the time of the Tax Review of 2017.
States apply to the United States District Court for the Southern District of New York to strike down the $ 10,000 cap on the federal tax deduction for local and local taxes, known as "SALT."
A "SALT deduction" refers to the individual federal income tax deduction for all or a substantial portion of property tax and property taxes, national and local taxes, income taxes and sales taxes.
The states argued that prior to the 2017 tax review, Congress has always allowed federal taxpayers to detail their tax deductions. deduct, subject to certain ancillary limitations, all of their local and local taxes, real and personal taxes, as well as state and local income taxes or sales taxes. "The new ceiling effectively eviscerates SALT deduction, reversing more than 150 years of precedent by drastically reducing the scope of the deduction, "states
States claim in the complaint that the new cap is unconstitutional because it goes beyond the bounds set on the federal government's power to impose an income tax and deliberately harms some states and their residents. New York Attorney General Barbara Underwood said New York has taken action to prevent Congress from unfairly targeting New York taxpayers by largely eliminating their ability to deduct national and local taxes on their federal tax returns. Limit the deduction imposing a huge burden on taxpayers in our states through a law that purposely aimed to compel New York and Member States to change their tax and tax policies, "said Barbara Underwood (D), Attorney General of New York.
The Right Tax Foundation was skeptical of the state's threats in April to file such a complaint, stating that it would be unlikely to be successful.
The group republished Tuesday the comments of Executive Vice President Joseph Bishop-Henchman. According to him, the lawsuit can be more of a political exercise than a legal process.
"The concern that high taxes may be detrimental to the competitiveness or attractiveness of a state like New York or Connecticut is valid, but the solution in re-examining the tax rates of the state rather than unfounded litigation, "he said
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