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Blue-state governors to sue Trump over tax law

Blue-state governors to sue Trump over tax law
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New York, New Jersey and Connecticut will jointly sue the federal government over the new GOP tax bill’s cap on state and local tax deductions, the states’ governors announced Friday.

The governors said in a statement that their states would form a coalition to file the lawsuit. They argue the tax law blocks the states from being able to fully govern and “unfairly targets New York and similarly situated states in violation of the Constitution,” according to a statement.

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"New Yorkers will not stand idly by as the federal government fires an economic missile at the fiscal health of our state," New York Gov. Andrew Cuomo (D) said. "The elimination of full state and local deductibility is a blatantly partisan and unlawful attack on New York that uses our hardworking families and tax dollars as a piggy bank to pay for tax cuts for corporations and other states."

New Jersey Gov. Phil Murphy (D), another party to the lawsuit, also ripped the tax plan as “a clear and politically motivated punishment of blue states — like New Jersey and our neighbors — who already pay far more to the federal government than we receive.”

And Connecticut Gov. Dannel Malloy (D) similarly panned the legislation.

"In short, this law does real harm to Connecticut taxpayers, who stand to lose over $10 billion in state and local tax deductions. Hundreds of thousands of residents could see a tax increase even as their property values decrease,” Malloy said.

Legal experts have expressed doubt that a lawsuit over the tax law, and more specifically over the limitations on deductions, would be successful.

Officials in blue states have been weighing their options to respond to the tax law enacted in December, which caps the state and local tax deduction at $10,000.

Cuomo has floated a lawsuit over the law before, and Murphy has also signaled that he would consider a legal challenge.

Tax experts also note that the state and local tax deduction effectively acts as a subsidy to the states, allowing them to raise taxes higher than they otherwise might.