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Malloy, Dem Govs: Eliminating Fed Subsidization of High State Taxes in New Tax Bill Unconstitutional

January 26, 2018 By Staff
Malloy, Dem Govs: Eliminating Fed Subsidization of High State Taxes in New Tax Bill Unconstitutional

Gov. Dan Malloy (D-Conn.) is suing over your tax cuts, because he thinks the capping of the state and local tax (SALT) deduction is unfair.

Gov. Dan Malloy (D-Conn.) joined a coalition of Democratic governors suing over the GOP tax bill on Friday, bizarrely claiming the the removal of the state and local tax (SALT) deduction, which subsidizes his high-tax state, is somehow unconstitutional.

“Connecticut Governor Dannel P. Malloy, New Jersey Governor Philip D. Murphy, and New York Governor Andrew M. Cuomo today announced that they are launching a multi-state coalition to sue the federal government to challenge the new GOP tax bill that eliminates the full state and local tax deductibility,” the release begins. “This provision effectively preempts the states’ ability to govern by reducing the ability to provide for their own citizens and unfairly targets them and similarly situated states in violation of the constitution.”

It’s a bizarre argument. There’s nothing in the Constitution about the SALT deduction, and nothing in the Constitution that says the federal government has to subsidize states’ high taxes by letting taxpayers write them off in a federal return.

Instead of, say, cutting taxes in the state, Malloy is going full bore after the federal government.

“The GOP tax legislation gave massive handouts to the wealthiest one percent and stuck middle class taxpayers with the bill,” Governor Malloy said. “In short, this law does real harm to Connecticut taxpayers, who stand to lose over 10 billion dollars in state and local tax deductions. Hundreds of thousands of residents could see a tax increase even as their property values decrease. The coalition we launch today will fight against the discriminatory impacts of this shortsighted and damaging Republican law on our states.”

Gov. Andrew Cuomo (D-NY), one of Malloy’s allies in this fight, has made the bizarre argument that somehow the capping of the SALT deduction amounts to ‘double taxation,’ even though federal and state taxes pay for, well, different services.

Is Malloy afraid the capping of the SALT deduction will expose taxpayers more to just how high he has taxed them?