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Four U.S. states file suit against tax reform
Other - JULY 19, 2018

Four U.S. states file suit against tax reform

by Andrea Zander

Connecticut, Maryland, New Jersey and New York have filed a lawsuit against the federal government over what it terms as the unconstitutional federal tax-reform law enacted earlier this year.

The petitioners claim the Tax Cuts and Jobs Act violates the 10th Amendment of the U.S. Constitution because changes to the state and local tax deduction, known as the   “SALT” provision, interfere with states’ rights.

Under the cap, individuals and married taxpayers filing jointly who itemize deductions may deduct only up to $10,000 annually for state and local income, property and sales taxes.

On Tuesday, New York Governor Andrew Cuomo called the Republican-backed plan an “attempt to hurt Democratic states.”

“It is totally repugnant and hypocritical of the fundamental conservative ideology which they preach — the limited federal government, respect state rights,” said the governor on a conference call with reporters. “This tramples on their own theory. And it is politically motivated.”

In addition, the four states said the cap will depress home prices, spending, job creation and economic growth, and impede their ability to pay for essential services such as schools, hospitals, police, and road and bridge construction and maintenance.

N.Y. Attorney General Barbara Underwood, who is leading the lawsuit with the attorney generals from Connecticut, Maryland and New Jersey, said the $10,000 cap is unconstitutional.

The Treasury Department said it is reviewing the complaint.

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