{"id":139237,"date":"2019-11-30T02:00:16","date_gmt":"2019-11-30T02:00:16","guid":{"rendered":"https:\/\/www.bnreport.com\/blue-states-appeal-limit-on-deductions-for-state-local-taxes\/"},"modified":"2019-11-30T02:00:16","modified_gmt":"2019-11-30T02:00:16","slug":"blue-states-appeal-limit-on-deductions-for-state-local-taxes","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/blue-states-appeal-limit-on-deductions-for-state-local-taxes\/","title":{"rendered":"Blue States Appeal Limit on Deductions for State, Local Taxes"},"content":{"rendered":"

Four blue states that lost their legal fight to overturn the new $10,000 limit on the federal deduction for state and local taxes\u2014the so-called SALT deduction\u2014filed an appeal Nov. 26 with the 2nd Circuit Court of Appeals.<\/p>\n

New York, New Jersey, Connecticut, and Maryland sued U.S. Secretary of the Treasury Steven Mnuchin and the IRS in July 2018 after the Tax Cuts and Jobs Act of 2017, a tax reform law that was backed by President Donald Trump, took effect.<\/p>\n

The law lowered tax rates, broadened the standard deduction and child tax credit, and limited the alternative minimum tax and various popular deductions, including the SALT deduction, which was previously unlimited. Most Americans received a net tax cut<\/a>.<\/p>\n

Limiting the SALT deduction may have been unpopular in some quarters\u2014New York Governor Andrew Cuomo called it \u201ceconomic civil war\u201d\u2014but economists say the move supports economic growth because it puts pressure on high-tax states, such as those participating in this lawsuit, to lower their tax rates.<\/p>\n

The lawsuit itself is premised on a conspiracy theory. The unproven theory is \u201cthat the SALT cap is a politically motivated bid to effectively raise property taxes in predominately Democratic states,\u201d said a statement<\/a> issued by Cuomo and New York Attorney General Letitia James, both Democrats.<\/p>\n

\u201cThis cap has already put a heavy burden on the hard-working, middle-class families of New York, and, in the years ahead, it is expected to cost New Yorks taxpayers over $100 billion, which is why we will fight this senseless and unconstitutional law,\u201d James said. \u201cNew York will not be bullied into paying more in taxes or changing its vital public investments because of Congress and the presidents partisan choices.\u201d<\/p>\n

In the lawsuit, the states claimed the ceiling on the SALT deduction was \u201can unconstitutional assault on states sovereign choices.\u201d<\/p>\n

Judge J. Paul Oetken of the U.S. District Court in Manhattan, who was appointed by then-President Barack Obama, rejected the states argument when he dismissed the lawsuit in a 37-page opinion Sept. 30 in the case cited as State of New York v. Mnuchin.<\/p>\n

Oetken ruled the states failed to prove the SALT cap was \u201cunconstitutionally coercive\u201d or infringed on \u201ctheir own sovereign tax powers.\u201d The federal government enjoys an \u201cexhaustive\u201d power to levy and collect income taxes, while \u201cstates remain free to exercise their tax power however they wish.\u201d<\/p>\n

Just because it hits taxpayers in some states harder than others doesnt mean the tax law is unconstitutional, the judge wrote.<\/p>\n

Congress enacted the SALT cap under \u201cits broad tax powers under Article I, section 8 and the Sixteenth Amendment,\u201d Oetken wrote. \u201cThe cap, like any federal tax provision, will affect some taxpayers more than others and, by extension, will affect some states more tRead More \u2013 Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Four blue states that lost their legal fight to overturn the new $10,000 limit on the federal deduct..<\/p>\n","protected":false},"author":1,"featured_media":139238,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46],"tags":[],"class_list":["post-139237","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"yoast_head":"\nBlue States Appeal Limit on Deductions for State, Local Taxes - Business News Report<\/title>\n<meta name=\"description\" content=\"Four blue states that lost their legal fight to overturn the new $10,000 limit on the federal deduct..\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bnreport.com\/en\/blue-states-appeal-limit-on-deductions-for-state-local-taxes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Blue States Appeal Limit on Deductions for State, Local Taxes - 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