tax

Four traditionally blue states have filed a lawsuit against the Trump administration in an effort to stop the Republican tax bill from being implemented.

Attorneys General for the states of Connecticut, Maryland, New Jersey, and New York all jointly filed a lawsuit in the U.S. District Court for the Southern District of New York on Tuesday, saying the tax bill President Trump signed into law late last year unconstitutionally raises taxes on their residents.

Part of the Tax Cuts and Jobs Act of 2017 capped the maximum deduction for state and local taxes at $10,000 per return, which residents of many blue states depend on to minimize the hit they take every April. New Jersey Attorney General Gurbir Grewal said that portion of the tax bill interferes with state and local taxing authority.

“Simply put, the federal government violated the constitution when it imposed new, arbitrary limits on the amount of state and local taxes that residents could deduct on their federal tax returns,” Grewal said in a public statement.

The argument put forward in the lawsuit isn’t without strong legal standing. The 10th Amendment to the U.S. Constitution states that all powers “not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” If the court rules in favor of the Attorneys General, it could feasibly establish a state sovereignty argument as legal precedent prohibiting the federal government to dictate maximum state and local exemptions.

California state senator Kevin de Leon (D), who is also running for U.S. Senate, passed a bill through the state senate that invalidated the Republican tax bill’s state and local exemption cap, saying that the legislation was necessary to prevent a massive tax hike on working-class Californians (the bill is currently awaiting action in the House Appropriations Committee).

Connecticut Governor Dannel Malloy (D) made a similar argument, saying that the Tax Cuts and Jobs Act of 2017 would simultaneously raise his residents’ taxes by billions of dollars.

“[T]his law discriminates against Connecticut taxpayers, who stand to lose over $10 billion in state and local tax deductions. Hundreds of thousands of residents could see a tax increase even as their property values decrease,” Malloy stated.

As of this writing, Trump has not yet commented on the lawsuit.

 

Scott Alden is a freelance contributor covering national politics, education, and environmental issues. He is a proud Toledo University graduate, and lives in the suburbs of Detroit.

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