Political Junkie

Political Junkie

Get breaking news stories and important updates around the 2016 Presidential Election race

 

High Tax States Sue Over Caps On State And Local Tax Deductions

people line up to pay their taxes

Four states known for their high taxes have filed a lawsuit against the Trump administration claiming that a cap on deductions for state and local taxes is unconstitutional. New York, New Jersey, Connecticut, and Maryland filed a lawsuit in the Southern District of New York that claims the new tax law targets them and interferes with their constitutionally granted taxing authority. 

“This cap is unconstitutional - going well beyond settled limits on federal power to impose an income tax,” New York Attorney General Barbara Dale Underwood said in a statement announcing the lawsuit. 

The new tax law caps the amount of money from state and local taxes that individuals can deduct at $10,000. States with high income and property taxes are worried that the new law will impact their residents, forcing them to pay billions more in taxes. 

"The federal government is hell-bent on using New York as a piggy bank to pay for corporate tax cuts and I will not stand for it," New York Governor Andrew Cuomo said.

The lawsuit estimates the New Yorkers will be saddled with an extra $14.3 billion in federal taxes in 2018 and at least $121 billion between 2018 and 2025. 

Joseph Bishop-Henchman, executive vice president at the Tax Foundation, told CNBC that the "lawsuit probably won’t go anywhere. But they can go to angry high-income people and say we tried to do something."

Photo: Getty Images


Sponsored Content

Sponsored Content