Attorney General Brian Frosh has joined Maryland with Connecticut, New Jersey and New York in suing the federal government over capping the state and local tax (SALT) deduction through last year’s tax reform. The claim alleges that the new $10,000 SALT cap violates the U.S. Constitution’s Equal Protection Clause and the 10th Amendment, which protects states’ rights, according to Governing.
From that coverage:
Calling the deduction cap an “unconstitutional assault” on state governance, the lawsuit accuses the federal government of meddling in state taxation and fiscal policies by making it more difficult for them, politically, to raise revenue if needed.
“The new cap disregards Congress’ hitherto unbroken respect for the states’ distinct and inviolable role in our federalist scheme,” the lawsuit says. “And, as many members of Congress transparently admitted, it deliberately seeks to compel certain states to reduce their public spending.”
In January, Governing interviewed tax law experts who opined that winning a lawsuit just like this would be very difficult.
The New York Times article expresses similar sentiments:
The lawsuit, filed in the Southern District of New York, was dismissed as a long-shot political stunt by supporters of the new tax code, but New York Gov. Andrew Cuomo said it is a practical act of self-defense against an adversarial federal government. …
When it comes to taxing Americans, “Congress can really do what it wants,” said Tax Foundation executive vice president Joseph Bishop-Henchman. “It’s really not much of a case.”
Attorney General Frosh stated:
Eliminating the SALT deduction will jack up taxes for more than half a million Marylanders. It is an attack on state sovereignty. It will reduce funding for local law enforcement and for construction of infrastructure statewide, and it will cripple our ability to educate our kids.
Maryland Attorney General’s press release