New York, Connecticut, Maryland, and New Jersey filed a lawsuit against the federal government this week alleging the GOP tax law unfairly targets states that are primarily “Democratic leaning.”
The complaint, which names the IRS and the Treasury Department as defendants, argues that law’s cap on how much taxpayers are allowed to deduct for state and local taxes from the federal portion of their bill is an “unconstitutional assault” on state sovereignty (the cap used to be unlimited, but is set now at $10,000).
“New York will not be bullied. This cap is unconstitutional — going well beyond settled limits on federal power to impose an income tax, while deliberately targeting New York and similar states in an attempt to coerce us into changing our fiscal policies and the vital programs they support,” New York Attorney General Barbara Underwood said this week in a statement.
The complaint’s chief argument is a bit ridiculous on its face, and it becomes only more absurd when you get to the part where the plaintiffs float an argument relying on a poor paraphrasing of National Review’s Ramesh Ponnuru.
The lawsuit, which can be read here in full, contains the following paragraph:
The funny thing is: This isn’t an honest characterization of what Ponnuru wrote on Nov. 8, 2017, in a post titled “Red States, Blue States, and Taxes.”
In that article last year, he specifically argued against the idea that one version of the tax bill (the one that did away with the SALT deduction altogether) was designed to punish blue states.
He wrote, “Republicans think they need to limit some deductions to make up some of the lost revenue from other parts of tax reform, and doing that in a way that minimizes the pain to their own constituents is bound to appeal to them.”
On Tuesday, Ponnuru defended his original article from being hijacked.
“I note that if one assumes that the state-and-local-tax deduction is unjustified, its repeal eliminates a subsidy from red states to blue ones,” he writes. “I think, and have written elsewhere, that it would be a good thing if the scaling back of the deduction leads state and local governments to retrench. But I certainly don’t think, and have never said, that scaling back the deduction coerces states and should be celebrated for coercing them. And the post quoted in the lawsuit doesn’t come within hailing distance of that sentiment” (emphasis in original).
Then there are the lawsuit’s other problems, of which there are many. It’s difficult to pick the worst of the arguments presented in the lawsuit, but it’s unlikely anything will top the uncharitable paraphrasing of Ponnuru.
