NY-CT-MD-NJ file lawsuit over Trump tax law
NY Attorney General makes the announcement
Despite the fact that millions of their citizens are enjoying the “crumbs” of the tax cuts, including bonuses from their now prosperous companies, four states are filing lawsuits against the IRS, claiming the tax law is unconstitutional.
New York, Connecticut, Maryland and New Jersey filed a lawsuit Tuesday claiming last year’s tax overhaul violated the constitution by unfairly targeting Democratic states.
The law puts a new cap on how much Americans are allowed to deduct for state and local taxes, or SALT, from their federal bill. Once unlimited, the deduction is now capped at $10,000. Deductions help reduce a person’s overall tax bill.
The cap will disproportionately harm high-tax states and their residents, the lawsuit says. It also claims the change in SALT interferes with states’ rights to make their own financial decisions.New York has said the cap will increase New Yorkers’ federal taxes by $14.3 billion in 2018.
The new, New York Attorney General Barbra Underwood posted a video on Twitter to make the announcement, saying her state “won’t be bullied.”
#BREAKING: We just filed suit to protect New Yorkers from the federal government’s unconstitutional tax law, which drastically cuts the state and local tax deduction. New York will not be bullied. https://t.co/MVH4wfbpZ0 pic.twitter.com/0vtxLYgh8c
— NY AG Underwood (@NewYorkStateAG) July 17, 2018
The new cap on deducting state and local taxes is unconstitutional for 2 key reasons. It goes beyond settled limits on the federal government’s power to impose an income tax. And it deliberately targeted—and will disproportionately harm—New York and similar states.
In fact, the unfair tax burden supposedly imposed by the loss of the SALT (State and Local Tax) deductions will be the core of the states’ argument.
The complaint argues that those who drafted the Sixteenth Amendment understood that “the SALT deduction is essential to prevent the federal tax power from interfering with the States’ sovereign authority to make their own choices about whether and how much to invest in their own residents, businesses, infrastructure, and more—authority that is guaranteed by the Tenth Amendment and foundational principles of federalism.” The SALT cap, the plaintiffs argue, disregards States’ rights and the “distinct and inviolable role in our federalist scheme.” And, the complaint continues, “as many members of Congress transparently admitted, it deliberately seeks to compel certain States to reduce their public spending.” That, the complaint argues, is unconstitutional.
The plaintiffs argue the SALT cap will raise the federal tax liability of millions of taxpayers. By increasing the federal tax burden on taxpayers in targeted states, the plaintiffs say that it will be more difficult for the states to maintain their taxation and fiscal policies. That means that they cannot make policy decisions without federal interference – a direct violation, they argue, of the Sixteenth Amendment. And, further, they say that the cap “violates bedrock principles of federalism enshrined in the Tenth Amendment.”
The court arguments by the plaintiffs should be fascinating. As a reminder, here is a passage from the 16th amendment, adopted in 1913.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
And subsequent to its passage, courts have been exceedingly generous their interpretation of the amendment to support income taxation. For example, in the Penn Mutual Indemnity case, which dealt with the issue as to whether the Sixteenth Amendment allows a direct tax on “wages, salaries, commissions, etc. without apportionment”, The United States Court of Appeals for the Third Circuit agreed with the Tax Court, stating:
…It could well be argued that the tax involved here [an income tax] is an “excise tax” based upon the receipt of money by the taxpayer. It certainly is not a tax on property and it certainly is not a capitation tax; therefore, it need not be apportioned. We do not think it profitable, however, to make the label as precise as that required under the Food and Drug Act. Congress has the power to impose taxes generally, and if the particular imposition does not run afoul of any constitutional restrictions then the tax is lawful, call it what you will.
It will be interesting to see how this group of Attorneys General argues that removing a deduction is an unconstitutional restriction.
However, I’ll sure say this for President Trump and his policies… he sure has managed to get blue states to embrace federalism with a passion that is truly astonishing. It’s a miracle.
DONATE
Donations tax deductible
to the full extent allowed by law.
Comments
Excuse me if I take this complaint with a grain of salt.
That Picture at the top! It’ Nancy the Salt Monster!!!!
http://memory-alpha.wikia.com/wiki/The_Man_Trap_(episode)?file=M-113_creature.jpg
Give credit where credit is due. She’s performed one of the greatest career move ever – from haunting houses to NY Attorney General.
But you knew immediately that she was a Leftist, didn’t you?
Her and moooochelle obama are poster-women for proof that beauty is skin-deep, but ugly is to the bone.
Early on, Ms. Underwear had two choices:
(1) stop eating donuts; or
(2) join the democrat party.
She obviously chose number 2.
As a government hack, guess who pays this cutie’s healthcare bills?
I just told my grandson that he would probably find someone who looks this. He thinks she is hideous, I have to agree.
NY-CT-MD-NJ Taxpayers must sue their state governments for wasting their taxpayer dollars on their states “frivolous” lawsuits that the states will lose anyways!
I wouldn’t bet the farm on that. Somewhere out there is Derrick Garland, Federal judge for the 2,192nd District Court of Molokai to rule in NY’s favor.
Trump: ‘Making the Left wail about the burden of high taxation and demand tax breaks for the rich’ great again.
Popcorn, please!
Ever notice how Trump ends up making the Left defend stupid things and thereby reveal their true feelings?
Here they defend Tax Breaks for the Rich like they have been defending MS-13.
Don’t you know President Trump has had to deal with exactly this sort of dishonest, criminal, evil people his entire life……..
I have re-designated all my AR’s and AK’s as “MS-13’s” so Nancy Pelosi and the democratic socialists would protect them.
Their reasoning sounds like a bit of stretch. The idea that the likely effectiveness (or lack thereof) of state policies constrains federal policies simply makes no sense.
I therefore predict that the states will win and the feds will have to take this all the way to SCOTUS, where the vote will be close. Kavanaugh’s confirmation can’t happen fast enough!
Those states are arguing “states rights” just like the Confederate States did………..
Federal powers are limited. Says so in something I once read.
should go directly to the Supreme Court.
As long as the law is applied equally across all of the states, how can it be unconstitutional?
They are invoking, in other words, the lovely concept of “disparate impact.” Which a) should make no difference, given the clear language of 16A and b) is a concept which should be buried by SCOTUS in any case.
But I’m sure there’s a judge in Hawaii who is at this very moment preparing an injunction in support of this suit.
Actually, they don’t need the guy in Hawaii. The judiciary in the Second District is almost as anti-Consitution as in the Ninth.
You know how they can fix this problem? Lower their tax burdens on their citizens. Funny how that option isn’t on the table.
No, they’re not invoking the “disparate impact” concept, they’re alleging that the disparate impact is intentional and is the true purpose of the legislation, which would make it deliberate discrimination.
Still not a winning argument, as far as I can tell. After all, states have been making the same complaint, often justly, for as long as the US has existed. Cf the tariffs which were a major factor in the tensions that ultimately led to the Civil War.
Shouldn’t the court throw this out as there is an easy legislative remedy for the plaintiffs?
There’s an even easier, non-legislative remedy for the plaintiffs: pay the taxes!
The left loves taxes. They always want to raise them. They insist the rich get too many tax breaks and don’t pay their fair share. Anybody who has to pay more than $10,000 in SALT is rich by most peoples’ standards, so they should be happy. Here’s their chance to pay their fair share.
Nancy Pelosi, who has been one of the loudest mouths calling for the rich to pay more taxes, is a multi-millionaire. Yet instead of being grateful for this opportunity to pay her “fair share” of taxes, she pre-paid her 2018 local property taxes so she could take advantage of the deduction before the new $10,000 limit kicked in.
https://freebeacon.com/politics/pelosi-tries-extend-tax-break-two-multi-million-dollar-homes/
The left’s hypocrisy truly knows no bounds.
Lefties, here’s an idea – since the implementation of the income tax is providing an unfair advantage to low/non-tax states, how about pushing for a repeal of the 16th Amendment?
(I know it doesn’t make any sense, but they might be dumb enough to buy it…)
Just tell them Trump loves the 16th Amendment. They will drive for a repeal.
The USSC has a long line of cases affirming the principle that all deductions are matters of “legislative grace.” Case is just a typical D stunt.
So, essentially they are saying heads I win, tails you lose. The federal govt can reduce tax rates for everyone, or increase tax deductions for everyone, but cannot reduce a tax deduction that solely benefits very rich people in their states.
The federal govt has long been raising or lowering this deduction, raising or lowering that tax rate, creating or eliminating this tax loophole, and all of a sudden this reduction of this deduction is somehow one too far, despite Congressional rules that essentially require just that, reducing some tax deductions to “pay” for the tax cuts.
My pet peeve here is that the basic problem solved by reducing the SALT deduction, is that the rest of the country had, in the past, essentially, been subsidizing high tax Blue states, at the expense of everyone else, by reducing the federal income tax for residents by the amount of state taxes they paid. If a state raised the taxes owed by someone, that amount was deducted from what they would otherwise owe in federal income taxes, leaving all that much more for everyone else to pay.
Section 8. Clause 1. “The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”
There’s an interesting dropping of a word in this clause. In the first part it says Congress has the power to lay/collect “Taxes, Duties, Imposts and Excises,” yet in the second part, pertaining to the issue of uniformity, the word “Taxes” has been omitted.
Hmmmm, wonder if the crack lefty lawyers in the NY AG’s office noticed that.
Which is a good point, even if the 16th amendment explicitly makes that moot.
This should be everything the left loves: it taxes the rich and it’s progressive taxation. The SALT deductions do nothing to dictate how states levy taxes; it just tells them how much the federal government will subsidize.
You have to understand that to Americans, the Constitution, laws passed in accordance with the Constitution, and the Court decisions about those laws that are in accordance to the Constitution are valid.
To Leftists, in and out of the Democrat party, the Constitution, laws, and court decisions are only to reinforce the power of the Left.
Let us say that the courts decide to tell them to take their court action, fold it until it is all corners, and store it personally and securely. You know that the Leftist State governments will either refuse to obey Federal law, or they will engage in violence.
It will be what it will be.
She may be a good lawyer which i doubt but she is one very coyote ugly woman.
Nobody gets that drunk.
Regardless of who she is or what she’s doing, nobody deserves your, or anyone else’s here on this site, scrutiny of her appearance. Back off.
You bet. Right after the left stops criticizing Melania Trump’s appearance.
Helen, is that you? You’re back so soon? You do know they shifted all the seats around in the WH Briefing Room, so it’s anyone’s guess if your favorite seat is still there. Obama, you remember him, doncha, well, he thrown out a lot of stuff like a bust of Churchill and whatnot. Your chair was probably part of that lot. Sorry,
http://www2.pictures.zimbio.com/gi/FILE+Helen+Thomas+Longtime+White+House+Journalist+C7PNz6jHcYpm.jpg
That’s not funny.
Then why am I laughing?
Helen: You are right. However, there is that quote attributed to Lincoln, but echoed by others about being responsible for ones own face. St. Peter, I think, said older women have a beauty which comes from having a characteristic of heart of a kind and gentle disposition. Nature is usually cruel to a woman’s beauty, and only that kindness and gentleness will make her attractive over the age of, what, maybe 27? Remember, she must wake up every morning and look at herself in the mirror. Be kind.
From somewhere on the internets:
“…the President told a cabinet member, “Every man over forty is responsible for his face.” Others think Lincoln said this about those over thirty. Arthur Schlesinger, Jr., said House Speaker Sam Rayburn told him this anecdote about Lincoln, except the cutoff was age fifty. The Viking Book of Aphorisms attributed “A man of fifty is responsible for his face” to Lincoln’s secretary of war, Edwin Stanton. A collection of Mae
West quotes included, “A man has more character in his face at forty than at twenty — he has suffered longer.” In 1956 Coco Chanel was quoted as saying, “Nature gives you the face you have at twenty, it is up to you to merit the face you have at fifty.” This was several years after Orwell’s journal entry, of course, as was Albert Camus’s 1960 line in The Fall, “Alas, after a certain age every man is responsible for his face.” In his novel The American Ambassador, Ward Just wrote of a character, “if at forty everyone has the face he’s earned . . .”
Myself, I have found women who teach children music in general, and piano in particular, to be very beautiful, regardless of their age. Rachel, I’m thinking of you.
Somebody did back off – into Ms. Underewear’s face.
Underwear is ugly because of what is within her: a corrupt leftist, in breach of her oath to the Constitution.
Mother Theresa was no fashion model, but nonetheless: she was beautiful than any of them because of her extreme beauty within.
Right Helen?
Now you have touched a nerve. Absolutely, Mother Teresa, now Saint Teresa of Calcutta, is truly wonderful, and beautiful. I am a big fan of hers. She instructed others to “Do small things with great love.” One time she picked up a starving begging child in the streets and took the child into a bakery. She said to the baker “This child is starving. Do you have anything we could feed him.” The baker spit into her face. She wiped her face off, and said “That works for me. Now, this child is still starving. Do you have anything we could feed him?” The baker did. He became a lifelong supporter of her work. Wow.
She was one tough cookie, and so are the nuns in the order she started.
Another time, when Mother Teresa was getting started, they had outgrown the facility they were in and the city fathers had given them an old, abandoned, Hindu temple to use. They started using it. A Hindu priest objected, and one night he showed up with a mob of young men, with clubs and torches, to drive them out. Somewheres around 250 young men, with clubs and torches. Mother Teresa came out, by herself, to greet the mob. She acknowledged why they were there. She suggested, that before driving them out, perhaps the leader to would come and see what they were doing. He accepted and was touring for over half-an-hour. When he came back, the mob was all ready to go in. He told them they could, when their sisters, girlfriends, and mothers were doing the work the nuns were doing. The mob dissolved. Double wow.
I simply don’t think comments on anyone’s looks improves the conversation. Plus it’s sort of an oxymoron that you take a shot at this woman’s appearance, albeit her politics are ridiculous, and then attempt to draw a dichotomy by using the inner beauty of Saint Teresa of Calcutta. Please just think about it. Thank you!
Even for a Democratic woman (a low standard to begin with), she’s incredibly “unattractive” (being kind).
…but I’m sure she has a great personality. Sadly though, all her clothing is covered with cat hair and men seem to have developed an allergic reaction to her presence.
I wish to plead insanity simply for opening this thread. Once seen, …
If ugly was money, she’d be richer than Trump.
When she stuck her head out the window, Ms. Underwear was cited for mooning.
When she went to a freak show, they let her in for nothing.
Her mother breast-fed her through a straw.
Rumor has it her proctologist stuck his finger in her mouth.
In her family album, they only keep the negatives.
When she goes to the beach, people ask the people with her what they used for bait.
When she comes over, people put newspapers on the floor.
Give her a hickey, and you’ll wind up with fur in your mouth.
Her father carries around the picture that came with his wallet.
When she opens the door on Halloween, kids give HER candy.
(See, it’s fun to trash leftist scum.)
Does New York allow a deduction for the Federal taxes paid? I know California does not. But that it a tax discussion we should have with our state reps that complain.
Repeal the 16th and 17th Amendments.
That would be circular. If you can deduct state & local taxes from your federal income (which you still can, up to the cap), then you can’t calculate your federal tax until you know your final state & local taxes.
I’m willing to bet that would be a big big no, it reduces the amount of money the state would collect. Utah did allow it at one time, but a few years back then they dropped it.
A) The states dont have standing
b) Since it is an income tax, it cant be contested until paid which doesnt occurr until 2019. See Kavanaugn DC court of appeals opinion on the ACA tax issue.
Most new yorkers will see a decrease in the federal income tax liability even with the reduced tax deduction of $10,000.
A) The property tax and state income tax are not deductible in computing the alternative minimum tax. So effectively, they never got a deduction for property tax or state income tax
B) the phase out of the AMT exemption was raised signigicantly with the 2017 tax act. As such a lot fewer new yorkers will be paying AMT.
C) bottom line – New yorkers will now get a $10,000 state and local tax deduction where previously they got none.
You would think that the state Attorney generals would be smart enough to consult a CPA or tax attorney before filing suit.
“Most new yorkers will see a decrease in the federal income tax liability even with the reduced tax deduction of $10,000”
Losing the personal exemption will make a difference for a lot of people.
There is no personal exemption under AMT. For 2017 and prior years, due to the High NY state income tax, property tax, no personal exemption for AMT, low phase out of the amt exemption, a very large portion of the NY population that were able to itemize received no benefit for the personal exemption.
For 2018, even with the elimination of personal exemption and the limitation of property/income tax to $10,000, NYr’s will be paying less income tax.
So what is the Attorney general doing – Suing the federal government because the citizens of her state are paying less income tax?
I think this makes a better argument that the DEDUCTION is itself unconstitutional as it interferes “with the States’ sovereign authority to make their own choices about whether and how much to invest in their own residents, businesses, infrastructure, and more.”
In a no-income-tax state, the state has chosen to spend less on all of the above in order to save its residents money, but they are then required anyway to pay a portion of the taxes levied by states like New York who have chosen to spend more (by paying additional Federal taxes to make up for the taxes waived by the deduction).
If New Yorkers choose to spend more on New York infrastructure, why should they not be the ones to pay for it?
Wouldn’t it be a hoot if this lawsuit resulted in the deduction being struck down in its entirety?
Seems like the rest of us should be suing to stop NY State from taxing non-residents.
No, I don’t think that argument works. But it makes more sense than the one the states are advancing.
Here’s a question: In the federal income tax law that was struck down and which the 16th amendment was passed in order to validate it, were state and local taxes deductible from taxable federal income? I don’t know the answer, but if they weren’t then that would be a fatal blow to this suit’s claim “that those who drafted the Sixteenth Amendment understood that the SALT deduction is essential”. So the first thing I’d look for in the brief would be evidence for this proposition.
Not that finding such evidence would save the suit. It’s ridiculous anyway. But I wonder whether it’s got such a blatant hole in it as to render all other discussion moot.
Millhouse “Here’s a question: In the federal income tax law that was struck down and which the 16th amendment was passed in order to validate it, were state and local taxes deductible from taxable federal income
”
No – see link
https://www.archives.gov/historical-docs/todays-doc/?dod-date=41
The AG comment regarding the state income tax deduction would not be a fatal blow to the lawsuit, it just demonstrates that she is stupid.
The fatal blow is
A) the lack of standing as noted above and
B) the anti injunction act which is the basis of Kavanaugh’d DC court opinion with the ACA – which basicly held the case isnt ripe. At least not until someone pays the additional tax.
Huh? The link is to a letter from Jefferson to Jay. How could that possibly be relevant? (And tomorrow the link will point to something else.)
Do you actually know the answer to the question, or are you just guessing? And why would you provide that link?
However, if the answer is indeed “no”, then how can you claim it isn’t a fatal blow to the case? Leaving aside the fact that what an amendment’s drafters understood is completely irrelevant, how could they possibly have understood the SALT deduction to be essential if it didn’t even exist at the time?
The link is to a site that posts a different document each day. sorry guys
Here’s another giant hole in the 16A argument: The 16A was not needed to tax income derived from employment. That was never struck down in the first place. The Supreme Court struck down only the federal tax on income derived from property (rent, dividends, interest), on the grounds that it was really a tax on the property itself. There has never been a question that Congress can tax income not derived from property, and I can’t think of any reason why it should not tax that portion of such income as is used to pay state & local taxes.
It must be nice to be an SJW Progressive. If you don’t like a new tax code you can say you are “bullied” and therefore it needs to go.
Anybody think this would have worked with being “bullied” by Obamacare?
Isn’t the mantra of the Democratic party tax the rich, tax the rich, well this change to the federal tax code will do that. I’m surprised there are even ‘rich’ in those states to be affected by this law, I would have thought they would have left for TX, and FL by now
If that picture is the NY Attorney General, I have to say that she has been whomped—several times, and hard–with an ugly stick. I mean I’ve seen butt ugly women before (mostly in my nightmares) but this “dish” is on the bottom of the bowl.
Not the ugly stick, but the forest.
That ugly woman’s real argument is, “Hey we’re pissed off. We were happy whacking our residents with obscene income and property taxes. We were here to rob them first! You are cutting in to our rice bowl.”
Never heard a Democrat argue about the merits of the 10th Amendment. That’s a new one.
If they start talking about rugged individualism you’ll know the end is near.
everyone is more conservative when it is THEIR OWN money
That’s not really true. The whole “sanctuary city/state” concept rests on the fact that the tenth amendment protects the states’ right to refuse to enforce federal laws. In that instance Democrats are vigorously defending it while some Republicans are attacking it.
But Wait ,, haven’t the demoCraps whined that the RICH should pay more in taxes ??? So when they DO they whine ,,, AGAIN. Can’t have it both ways DipShits !!
Just look at those four states compared to the rest of the country (excluding CA), these 4 are high tax states that rely on taxpayer dollars to fund their democratic social programs and special interests. In addition these states are over crowded, have terrible infrastructure and comparatively higher crime than most other states. So not surprising they are choosing the current path of action taken by groups who want to disrupt, litigation! Well, I’m doing my part by leaving MD, a once decent state that has gone the way of California with taxes, sanctuary cities and high crime. Adios “Free state”.
That’s a man baby.
last time I saw a face like that it had a hook hanging out the side of it. Ugggh.
Didn’t the Republicans “compromise” and allow $10,000 for those SALT deductions? I would say that was generous, and the deduction should be $0.00.
They capped it at $10K, so that it would only affect people in those states where these taxes can come to more than that. That’s why these states are complaining that it was targeted at them, which it absolutely was. As someone, I forget who, once said, elections have consequences.
So the Federal government thinks income taxes in some States are too high?
And you have a problem with that?
Most tax items benefit some and hurt others. The suing states are “aggrieved” only because they are the losers on this particular tax cap. As a NY taxpayer, I resent my state wasting state taxpayer resources fighting a lawsuit the state is bound to lose, a frivolous law suit at that. They should stop whining and start looking at ways to cut their own state tax burdens. The “crumbs” we get from the overall tax bill will likely outweigh any losses on this one deductible item. Remember the standard deduction was greatly increased.
I think its time to fire On Tuesday, Alexandria-Ocasio Cortez as the “new face of the Democratic Party” and hire on this stunning example as THE NEW FACE OF THE DEMOCRATIC PARTY.