High-tax whining: Suing to restore tax subsidiesEDITORIAL
July 19. 2018 7:48PM
High-tax states think that the rest of the country has a constitutional obligation to underwrite their bad policies.
The tax reform bill passed last year caps the amount of state and local taxes (SALT) that taxpayers may deduct on their federal tax returns. Previously unlimited, states could impose higher taxes on their residents knowing that some of the pain would be absorbed by Washington. This shifts the tax burden to states with more sensible tax policies, such as New Hampshire, and to future generations as Congress runs up the national debt.
Tax-and-spend politicians are so upset that Congress took away this cushion that they are suing to get it back.
Four high-tax states, New York, New Jersey, Maryland, and Connecticut, filed suit in U.S. District Court this week claiming that the law unfairly targets Democratic states. But Maryland has a Republican governor, and so did New Jersey when the law was introduced.
Capping SALT deductions does hit high-earners in high-tax states harder. Normally, Democrats would love such a progressive tax policy. But not when it makes it harder for them to raise state taxes. We hope this lawsuit is quickly dismissed.