Liberal states with high taxes are vowing to sue the Trump administration due to state and local tax deductions being limited by the recently passed tax reform legislation. According to USA Today, the governors of Connecticut, New Jersey and New York claim that the law is illegal and they will attempt to overturn it.
The governors are calling the tax reform a deliberate move to “punish” blue states, with New York Governor Cuomo calling the $10,000 limit on deductions for state and local taxes “an economic missile.” Cuomo claimed the elimination of full SALT deductibility will cost New York $14 billion, however the administration has touted an additional $668 billion in savings for the entire nation over the next 10 years.
Moreover, as PJ Media reported, the “limit on deductions affects taxpayers in every state, not just the three that are suing.” Grover Norquist and Patrick Gleason took took note of the irony that in high tax states and cities “who oppose tax breaks for ‘the rich’”, politicians support a policy that benefits “upper-income taxpayers” the most.
The law was lawfully passed and signed by President Trump, so liberal states will have a difficult time proving in court that it is illegal simply because they receive less money. Countless corporations across the nation and small businesses have announced raises, bonuses, and increased worker benefits due to the tax law.
Could these governors deny their own states the benefits that this tax reform has had on the whole nation thus far? It seems a strange move to make during an election year when so many voters are concerned about the government’s out-of-control spending habits and have already seen bigger paychecks due to the law.
The tax reform has proven beneficial to markets and we have raked in substantial improvements to our GDP and job growth. This has proven to do more to bring wealth to these Democratic states than any tax incentive bailout. While these Democratic governors may not have a hard time making their case to a few liberal justices, they will certainly have a tough time explaining to the “little guy” how they will fight for him by fighting tax cuts past 2018.