THE ARGUMENT
The state and local tax ("S.A.L.T.") deduction cap
that is now in effect was enacted in 2017 as part of the Tax Cuts
and Jobs Act. It allows individuals and married taxpayers filing
jointly who itemize deductions to deduct only up to $10,000
annually for state and local income, property, and sales taxes.
Married individuals filing separately are capped at $5,000. Before
the cap, S.A.L.T. deductions were unlimited.
Fearing, among other effects, that individual residents of these
states would move to lower-income tax states, New York, New Jersey,
and Connecticut instituted legal action in Federal district court
to invalidate the provision. N.Y. and N.J. argued that the cap
infringed upon their constitutional right to tax and that it
exceeded Congress's broad taxing power. They further argued
that the cap was intended to harass high-property-tax states, such
as N.Y. and California, by coercing them to change their tax
policies. The states also claimed
