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New York, Conn. Sue Federal Government Over Loss Of SALT Deduction

Hans Pennink
New York Attorney General Barbara Underwood is leading the lawsuit on behalf of N.Y., Conn., N.J., and Md..

New York, Connecticut, New Jersey, and Maryland are suing the federal government over President Trump’s 2017 tax reform that caps state and local property tax deductions at $10,000.

The suit alleges that the cap on SALT deductions is meant to punish so-called “blue states.” It also alleges that the cap violates states’ rights to make their own fiscal decisions.

Connecticut Attorney General George Jepsen says hundreds of thousands of residents will lose the ability to deduct state and local taxes from their federal returns.

“If the law is allowed to go into effect, unchecked, Connecticut residents will lose over $2 billion in tax deductions, so that's a lot of money. My job is to protect the citizens of the state of Connecticut when there is an argument that their legal rights are being encroached and that's exactly what we're doing.”  

New York Governor Andrew Cuomo agreed, saying, “This is not what our Founding Fathers intended. They did not intend for the federal government to manipulate or politically retaliate against states. It’s violative of the fundamental relationship between the federal government and the states. It is un-American.”

Among the evidence submitted is President Trump’s campaign advisor Stephen Moore calling the SALT cap “death to Democrats.”

The suit will be led by New York Attorney General Barbara Underwood.