New York, Connecticut and two other states have sued the federal government over a provision in last year’s federal tax overhaul that limits individual state and local tax deductions to $10,000.
Gov. Andrew M. Cuomo, D-N.Y., has threatened for months to sue over the GOP-led Tax Cuts and Jobs Act, which he has called an act of “economic civil war.” The cap on the deductions, known as SALT, could increase New Yorkers”™ federal taxes by $14.3 billion in 2018 and an additional $121 billion between 2019 and 2025, according to a state analysis.
The lawsuit, filed July 17 in Manhattan federal court, is led by New York Attorney General Barbara Underwood and joined by the attorneys general of Connecticut, Maryland and New Jersey.
The four-state coalition argues in the lawsuit that the law targets New York and other Democratic states, interferes with each state’s right to make fiscal decisions and will disproportionately harm taxpayers.
The lawsuit cites public statements from the bill’s supporters that said the SALT cap would send a message to Democrat-controlled states, including from U.S. Treasury Secretary Steve Mnuchin and Stephen Moore, an adviser to President Donald Trump.
Underwood said in a press release announcing the suit that New York “will not be bullied.”
“This cap is unconstitutional ”“ going well beyond settled limits on federal power to impose an income tax, while deliberately targeting New York and similar states in an attempt to coerce us into changing our fiscal policies and the vital programs they support,” Underwood said.
Cuomo added that the lawsuit represents the first state challenge to the tax law. “The federal government is hellbent on using New York as a piggy bank to pay for corporate tax cuts, and I will not stand for it,” he said.
The lawsuit says downstate New Yorkers ”“ which includes Long Island, New York City and Westchester County ”“ will pay an additional $12.8 billion per year in federal taxes because of the limit on SALT deductions. The rest of the state will pay an additional $1.5 billion, according to estimates from the New York State Department of Taxation and Finance.
Westchester County Executive George Latimer said, “This federal tax law is not only double taxation but it also unfairly targets communities like Westchester County ”“ and every homeowner in this county is a victim. In Westchester, where the average home is valued at $691,392.00, home values are projected to take a 7.6 percent hit.”
The lawsuit also uses data from Moody”™s Analytics and state figures on New York home prices to estimate that the 2017 tax act could result in a statewide loss of $100.8 billion in home equity. Westchester would face the most significant decrease in home values in the state, according to the analysis, with values estimated to decrease 7.6 percent due to the SALT cap.
The full lawsuit is available here.
Cuomo’s pretty clueless on this as few NYers will see a tax increase because of Trump’s tax cut. He does seem to be standing up for his millionaire friends who may or may not pay more. Only his millionaire friends can afford to pay $30k to $40k in property taxes in the 1st place and we all know if you pay AMT already, capping SALT won’t hurt you at all.
Governor Cuomo should focus his interests on the way this Democratic state CHOKES its residents with tax on top of tax on top of tax on top tax forcing residents to out of New York @NYGovCuomo
SALT is only going to hurt his agenda not ours !