Democratic states suing the Trump administration over tax law
A coalition of high-tax blue states are suing the federal government over the Tax Cuts and Jobs Act that President Trump signed into law last year.
New York, Connecticut, Maryland and New Jersey are crying foul over new rules on state and local tax (SALT) deductions, which cap how much residents can deduct from their federal taxes based on their local property, income and sales taxes.
“What is being the motivation behind this clearly in my opinion is politics and I don’t see this legal case going the distance,” Rep. Tom Reed (R-NY) said on Wednesday.
The states’ lawsuit claims that the cap of $10,000 on SALT deductions infringes on their constitutional right to tax as they see suitable while harming taxpayers in those states.
“We fought for this $10,000 local tax deduction compromise because we knew those voices needed to be heard,” Reed said on FOX Business’ “After the Bell.”
He said states need to get their fiscal priorities in order, and excessive spending is at the root of tax problems in high-tax states.
“You’re already seeing taxpayers in New York leaving in droves,” he said. “People are leaving New York City because the taxes are too high.”