Supreme Court will not review SALT deduction cap challenge

The Supreme Court will not revive an attempt by New York and three other states to overturn the Trump-era $ 10,000 cap on state and local tax deductions, known as SALT.

The court’s denial of certorati was tucked into a 17-page Monday order list and did not include any reasoning from any of the justices.

New York, New Jersey, Maryland and Connecticut had sued the federal government in 2018 over the deduction cap, which was part of the tax reform law enacted by the 45th president in 2017.

The cap blocks taxpayers from deducting more than $ 10,000 per year in their state and local taxes when itemizing federal deductions.

In October of last year, the Second Circuit Court of Appeals rejected the states’ argument that the deduction cap unconstitutionally infringed on their sovereignty.

New York, New Jersey, Maryland and Connecticut had sued the federal government in 2018 over the deduction cap.
Patrick Semansky / AP

Monday’s order ensures the deduction cap will remain in place barring congressional legislation.

Many Democrats from high-tax blue states are eager to raise the cap by enacting a version of President Biden’s Build Back Better bill by the end of this year.

Moderate Reps. Josh Gottheimer of New Jersey and Tom Suozzi of New York have proposed raising the cap from $ 10,000 to $ 80,000, and have even threatened to pull support from a scaled-down version of the social spending bill if it is not included.

“No SALT, no deal! In November, the House passed Build Back Better, legislation that addressed the SALT cap. This legislation has been held up in the Senate ever since, ”Suozzi (D-NY) tweeted earlier this year. “A SALT fix must be part of the Senate’s version of Build Back Better. New Yorkers need relief now. ”

Supreme Court Justices.
The court’s denial of certorati did not include any reasoning from any of the judges.
Erin Schaff / Pool / AFP via Getty Images

However, left-wing Democratic lawmakers have pushed back against plans to raise the cap, with Rep. Alexandria Ocasio-Cortez (D-NY) describing SALT relief as a “gift to the billionaires.”

Gottheimer fired back in February, accusing his progressive colleagues of “hypocrisy” in an interview with The Post.

“If they actually care about folks, they should want to make sure it’s all restored,” he said, “because the states that tend to pay more and have higher tax burdens, but the states that are higher-cost states and that do more for folks and invest more in communities and families, you would think that they would be more for this. ”

The Build Back Better plan has been moribund in Congress since December, when moderate Democratic Sen. Joe Manchin of West Virginia said he would not support the current version of the bill.

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