In August, the Treasury Department issued new regulations addressing the gimmicks various states concocted to dodge a new $10,000 cap on the state and local tax deduction (pun inducingly known as SALT). Blue-state politicians such as New Jersey Gov. Phil Murphy decried “[the president’s] unfair and arbitrary tax hike on working and middle class families” (just how many working-class families in New Jersey pay more than $10,000 a year in state taxes remains unclear). This rhetoric also comes with a lawsuit, which was filed in July by New York, New Jersey, Maryland, and Connecticut, and claims that capping the deduction is not simply a policy disfavorable to those state’s citizens but an unconstitutional attack on federalism itself.
While one can debate the policy merits of the cap, and the tax-reform legislation as a whole, the contention that it offends any constitutional principle whatsoever should be consigned to the dustbin of quackery and bluster.
