On Monday, a federal magistrate dismissed the lawsuit coming from four different states over the cap on the deductions placed by President Trump over the local and state taxes in the latest reform to tax deductions.
Paul Oetken, the District Court Judge, who was appointed by Obama in the New York Southern District, ruled that these states have failed to showcase that this provision went way beyond the powers of the Congress. He also dismissed the argument provided by the States, mentioning that this cap was actually placed with an intention to “coerce” the states into bringing a change to their own rates for taxes.
In his decision, Oetken mentioned that these states plausibly failed to allege things that were wrong with the tax deduction cap. This law brought forth by the Trump administration in the year 2017 was a tax law that capped the SALT or Salt & Local Tax deduction at the mark of $10,000. This decision was challenged by four of the blue states which included Maryland, Connecticut, New York, as well as New Jersey.
In their argument, the states also mentioned that this move was actually intended for hurting certain states.