SALT Suit

The Story

Four states, including New York and New Jersey, have filed suit against the federal government over a key provision in President Trump’s tax law. The lawsuit claims that capping the deductibility of state and local taxes (SALT) is unconstitutional, and it seeks to have the cap lifted. The suit is the latest effort by high-tax states to evade the consequences of the new tax environment. Instead of coming up with elaborate ploys, New York and the other states should figure out how to manage their expenses more responsibly, instead of making the rest of the country share the burden.

The Facts You Need to Know

  1. Helping Whom?: Repealing the SALT cap would cost hundreds of billions of dollars and almost exclusively benefit the wealthiest 1 percent of New Yorkers. Read more.

  2. Regressive: In New York State, half of all SALT deductions went to households with more than $500,000 in income. Read more.

  3. Worst: New York State income taxes are now at their highest level ever, relative to states with lower or no taxes. Read more.

“Residents of New York...should feel embarrassed and ashamed of their state government’s hijacking of the federal court system for a legally incoherent publicity stunt.”

Brian Riedl, Manhattan Institute senior fellow

Twitter Take

The Past is Present

Don't Hike Taxes, Cut State Spending By E. J. McMahon (April 7, 2003)

“Not only did labor unions and health-care groups stage a big rally in Albany last week, they’re mounting a multimillion-dollar ad campaign to shock and awe the Legislature into restoring billions in spending to Gov. Pataki’s proposed budget. As a result, the conventional wisdom in Albany is that a big state tax increase is inevitable.”

And in other news...

“The Metropolitan Transportation Authority has wiped $376 million from its farebox revenue forecast over the next four years because of declining ridership on New York City’s subway and buses.”