It looks like a key component of President Trump’s Tax Reform might get to stick around. CSNBC notes, New York judge dismisses blue state suit over SALT tax deductions
From the article
On Monday, a federal judge dismissed a lawsuit filed by four states against the IRS, thwarting four blue states’ challenge against a new $10,000 cap on the deduction for state and local taxes, also known as SALT.
First, some background. In 2017, as part of President Trump’s Tax Reform Initiative, Congress passed the Tax Cuts and Jobs Act. Part of this legislation was a reduction to $10,000.00, the amount of state & local taxes that could be written off on Federal Income Taxes.
As a conservative reform measure, this was brilliant. It limited the amount of Federal subsidies high tax, mostly Democrat locales, could receive via the Federal Tax Code. Before this legislation, low tax states were effectively subsidizing higher tax states. This feature in the new law leveled the playing field by stopping the reward for prolific spending by some states, at the expense of others who more effectively manage their budgets.
Of course four leftist states (New York, New Jersey, Connecticut and Maryland) promptly sued. This past Monday a New York Federal District Judge, J. Paul Oetken, an Obama appointee, dismissed the case.
This development puts the ball back in Congress’s court, said Michael D’Addio, principal at Marcum in New Haven, Connecticut.
“You know that the federal law is effective and it won’t be overturned because this case has been dismissed,” he said. “Unless you pressure your senators and representatives, there won’t be a solution other than a congressional one.”
Of course this doesn’t end there. The leftists, if they can’t win at the ballot box or in court, try to circumvent the rules. At the same time as the above suit was playing out in New York…(emphasis mine)
A second lawsuit filed in July 2019 by New York, New Jersey and Connecticut in the Southern District of New York is still ongoing.
This time, the three states are suing to protect workarounds they built to permit taxpayers to claim deductions beyond the $10,000 SALT cap.
The three states passed legislation that would permit municipalities to establish charitable funds to pay for local services and offer property tax credits to incentivize homeowners to give.
This way, the taxpayers could write off the [their tax] payment as a charitable deduction on their federal tax returns.
Taxes now counting as charity? As I’ve often pointed out, the left never, ever quits. They are all about results, even if they have to cheat. What is more worrisome, is their entitled attitude. They honestly believe that it’s morally fine to force other states to subsidize their profligate spending habits.
Rush Limbaugh is correct. There is no compromise with these people. There is no reciprocal, “reaching across the aisle.” We must defeat them and defeat them soundly. Here’s hoping that the judge in the current case, see the Leftist effort for what it is—and quashes it.
Mike Ford, a retired Infantry Officer, writes on Military, Foreign Affairs and occasionally dabbles in Political and Economic matters.
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