A federal judge’s decision Monday to toss Gov. Andrew Cuomo’s lawsuit over the federal cap on the state and local-tax deduction had to be — as the Empire Center’s E.J. McMahon put it — “among the least surprising” rulings of the year. The suit, after all, was patently bogus from the start.
“The cap, like any federal tax provision, will affect . . . some states more than others,” noted Judge Paul Oetken. States make their tax decisions within the context of federal law. That is, state taxes are up to the states themselves, and they have no right to expect federal law to accommodate them — with a full federal deduction — just because they opt for high taxes.
Cuomo, along with officials from Connecticut, New Jersey and Maryland, tried to claim Trump and Congress targeted high-tax (Democratic) states for political reasons. Yet the deduction is really a subsidy from states with relatively few high-income earners to wealthier states, like New York.
And if Cuomo wants to blame someone for the hit on New York’s highest earners (an odd concern for a progressive), he should look in the mirror: He’s been governor for almost nine years, and, even after he blasted New York’s high top tax rates, he’s repeatedly reimposed them.
This year, for example, he extended the millionaire’s tax for another half-decade.
Actually, as a progressive, Cuomo may have little concern for top earners. But he does worry legitimately that they’ll flee the state, taking their tax dollars with them.
The best way to avoid that isn’t through a meritless lawsuit but by lowering taxes.
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