By Ilana Siyance
Governor Andrew M. Cuomo is holding on to hope that he can undo President Donald Trump’s cap on State and Local Tax (SALT) deductions. The provision, which was added in the 2017 Tax Cuts and Jobs Act, has been unpopular from its onset with high-tax states. Governor Cuomo along with other governors from several states have been trying to fight the law’s $10,000 cap on write-offs per household for SALT deductions on federal returns.
As reported by Crain’s NY, on Monday, a federal judge brought forth by the States New York, New Jersey, Connecticut and Maryland seeking to overturn the controversial tax law. U.S. District Judge J. Paul Oetken of the Southern District of New York upheld the law, deciding that congress did have the authority to make the tax change. “The States have cited no constitutional principle that would bar Congress from exercising its otherwise plenary power to impose an income tax without a limitless SALT deduction,” Oetken wrote.
In response, Cuomo refused to admit defeat, and said that the blue states would consider appealing the decision. “The bottom line is this policy is unprecedented, unlawful, punitive and politically motivated—and it must be stopped,” Cuomo said. “We disagree with the court’s decision and are evaluating all options, including appeal.” The governor says that the SALT limit is a “partisan” play, which targets Democratic states, reallocating their funds, and paying them back to Republican states in the form of social services. Along with other proponents, he maintains that historically blue states like NY, NJ and California pay out more taxes to Washington annually than they get back in programs and benefits, whereas many Republican states such as the low-tax Southern states pay less but get back more than their fair share.
On Tuesday, the governor vehemently took the case up again on the radio. “We had a setback from the court, we’re going to deal with that, but I’m going to fight this fight,” the governor said. “My job is to fight for the people of this state every way possible, and that’s what I do, and that’s what I always do and I do it until the bell sounds. And this is a fight on many fronts.”
Cuomo insists that the democratic states and politicians need to continue to battle against this law, in the U.S. capital and even throughout the 2020 presidential race.
“Our congressional representatives have to insist that they change this, and our senators have to insist that they change this,” Cuomo said. “We have a congressional fight, we have a judicial fight, and then ultimately a political fight. And anyone who wants to be president of the United States, I want to hear them say that they’re going to fight this, and repeal this SALT provision should they win.”
Most analysts feel that the law has a low likelihood of being repealed at this stage of the game. The success of appealing this lawsuit may lie on the discovery of information proving that Republican leaders had the intention of gaining preferential tax structure. So far, a conspiracy or targeting of states has not been demonstrated.