New York Governor Andrew Cuomo said Thursday that the new federal tax overhaul targeting high-tax states may be unconstitutional as it possibly violates New York resident’s rights to due process and equal protection.
President Donald Trump signed the sweeping tax bill into law on Friday. It introduces a $10,000 cap on state and local income deductions as well as on property taxes, a provision known as SALT. The provision will affect numerous taxpayers in high-income, high property values, and high-tax states, Reuters reports. New York is among these states.
“I‘m not even sure what they did is legally constitutional and that’s something we’re looking at now,” Cuomo said.
He also outlined reasons as to why the tax overhaul may be unconstitutional.
“Politics does not trump the law. You have the constitution, you have the law, you have due process, you have equal protection. You can’t use politics just because the majority controls to override the law,” Cuomo added.
The governor’s comment referred to the Fifth Amendment which guarantees the protection of individuals from the seizure of property without due process, which the Supreme Court interprets as guaranteeing equal protection by the law.
Law professors say that the provision might interfere with the U.S. Constitution’s 10th Amendment, which protects states’ rights, while tax attorneys believe that Cuomo’s legal argument against the tax bill could be that it discriminates and places an unjust tax burden on “blue states”, that is states that heavily voted for Democrats in the past.
“The de facto effect of this legislation is to discriminate against blue states and particularly from (Cuomo‘s) perspective the state of New York,” said Joseph Callahan, a New York-based attorney.
On the other hand, some tax experts claim that the Supreme Court interprets the 16th Amendment to allow Congress freedom to tax as it sees fit.
“I don’t understand how they think they have a valid lawsuit here,” David Gamage, a professor of tax law, said, referring to blue state governors’ possible challenges to the bill.