Golly, let’s see if I have this right. New York state and the Democratic governors and/or attorney generals of three other Democratic states — Connecticut, New Jersey and Maryland — are suing the U.S. Treasury because under the new tax law deductions for state and local taxes are limited to $10,000.
This is unfair, say these states, because they are high-tax states and the law discriminates against their citizens because they can’t deduct the full amount of the state taxes. What’s logically wrong with this picture?
Well, first the Democrats rail against income inequality. But two of the states in this litigation, New York and Connecticut, rank Nos. 1 and 2, respectively, in income inequality in the nation, according to the Economic Policy Institute. Now I don’t personally think that is necessarily a bad thing, but most Democrats do.
Next, this restriction only affects those who itemize deductions on their tax returns and are, therefore, mostly higher-income taxpayers. According to Pew Charitable Trusts, 29.6 percent of filers nationwide Itemize these tax deductions, while the average of the four states in this litigation who itemize is 40.9 percent.
This clearly indicates that if the Democrats want to reduce income inequality, they shouldn’t oppose the limitation, because it works toward their grand scheme of income equalization by taxing the rich more.
But if these states want their citizens to benefit from the tax law, I think there’s a simpler way than litigation — just cut taxes.