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July 19 2018

Four Blue States Sue to Preserve Tax Loopholes for the Rich

by Charlotte Hays

Quote of the Day:

But savor the irony that New York Governor Andrew Cuomo and others are standing up for millionaires.

--Editorial Board of the Wall Street Journal

Here is what baffles me: Democrats loudly proclaim that they want to raise taxes on the rich, and then, when somebody eliminates a loophole for the rich, they sue. Go figure.

That seems to be what is happening with four blue states, where Democratic politicians are rallying for the rich. The editorial board of the Wall Street Journal put it this way:

The Republican tax bill is the law for 2018, but some progressives are mounting an insurrection against taxation without . . . loopholes for rich people. As a slogan it’s not the Boston Tea Party, but check out the revealing legal challenge from four states.

The GOP tax reform reduced one of the deductions that most benefitted the rich. Before reform, taxpayers could write off all their state and local taxes. This was great for richer taxpayers who itemized. And it was great for state and local governments, which could spend wildly, assured that rich people got a loophole.

Tax reform doubled the standard deduction, which benefits the rest of us, and capped the deduction for state and local taxes at $10,000. And Democratic politicians are crying bloody murder--on behalf of the rich. So they didn't want to tax the rich after all? The editorial board urges:

But savor the irony that New York Governor Andrew Cuomo and others are standing up for millionaires.

The attorney generals of four very blue states, New York, New Jersey, Connecticut and Maryland, have filed a suit in federal court in Manhattan to protect the rich from higher taxes.

The claim of the lawsuit is that tax reform violates the Constitution because “the new cap disregards Congress’s hitherto unbroken respect for the States’ distinct and inviolable role in our federalist scheme.”

Just an aside: isn't it nice that our blue state friends are discovering the joys of federalism? (Next thing you know, they'll be carping about "unelected judges." Oh, wait, they're already doing that too.)

The states advance several legal arguments that are questionable, but here is my favorite:

The biggest hoot is that the plaintiffs claim tax reform passed “with a bare congressional majority of one party,” as if narrow majorities are unconstitutional. That would have killed ObamaCare, which passed without a vote to spare in the Senate.

For all the talk about how progressive states need high taxes for roads and free college, note that they are dumping taxpayer cash into lawsuits that are essentially campaign documents. These states apparently have money to burn.

Save Our Rich!

How's that for a blue state slogan?

 

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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