In effect, they would divert $650 billion to the super-rich.
Just when you thought politics in 2018 could not get any more bizarre, four states are now suing the federal government in hopes of mandating a $650 billion tax cut, of which 57 percent would go to the richest 1 percent of families. Rather than push for conventional legislation, the states are asserting that the U.S. Constitution requires this tax cut for the rich. One other thing: The lawsuit was filed by Democrats, not Republicans.
Specifically, the attorneys generals of New York, New Jersey, Connecticut, and Maryland have filed suit in federal court, arguing that the recent tax reform’s capping of the state and local tax (SALT) deduction at $10,000 per filer violates the Constitution. The lawsuit, a pure publicity stunt, is so frivolous and unserious it may as well have been written in crayon.
But don’t take my word for it. Even the AGs’ fellow liberals at ThinkProgress have called this “one of the stupidest lawsuits of the Trump era.” University of Iowa law professor Andy Grewal wrote, “If this lawsuit succeeds, I will post a video of myself eating every single page of the Internal Revenue Code, one-by-one.”
Before diving into the lawsuit, let us step back and acknowledge the bizarre politics at play. Throughout 2017, Democrats savaged the Republican push for “tax cuts for the rich.” Dozens of liberal organizations formed a group called “Not One Penny” to fight all upper-income tax relief. Eventually, the GOP enacted the Tax Cuts and Jobs Act (TCJA), which more or less cut taxes across the board. The TCJA even made the federal tax code slightly more progressive, by raising the estimated share of 2019 taxes paid by million-dollar earners from 19 to 20 percent.
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Brian M. Riedl is a senior fellow at the Manhattan Institute. Previously, he worked for six years as chief economist to Senator Rob Portman (R-OH) and as staff director of the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth. Follow him on Twitter here.
This piece originally appeared in National Review Online