New York, New Jersey and Connecticut to sue over federal tax law

Joseph Spector | USA TODAY Network-New York

Show Caption Hide Caption Video: 'We're doing everything we can to thwart the effects of the federal plan' Gov. Andrew Cuomo gave his budget address on Tuesday, Jan. 16, 2018.

ALBANY, N.Y. — The governors of Connecticut, New Jersey and New York said Friday they will form a coalition and sue over the federal tax plan that limits state and local tax deductions.

New York Gov. Andrew Cuomo said the federal tax plan approved last month by Congress and signed by President Trump is an assault on blue states with high taxes.

The tax reform limits the deductibility of local and state taxes, including property taxes, to $10,000 a year, which hurts high-income earners.

Jan. 16: Taxes, Trump, transit among headaches New Jersey's new governor will face

Jan. 10: IRS may need an extra half billion dollars to implement new tax law over the next two years

Jan. 5: High-tax states plot ways to get around new limit on federal tax deductions

Cuomo contended the federal law is illegal. They plan to sue to try to overturn it.

New York, New Jersey and Connecticut are launching a coalition to sue the federal government to reverse the unjust tax law.



We will not stand idly by as the federal government attacks the fiscal health of our states. — Andrew Cuomo (@NYGovCuomo) January 26, 2018

"There is a very strong argument that the bill is a fundamental violation of states’ rights and repugnant to the very concept of federalism that formed this nation," Cuomo said in a conference call with Connecticut Gov. Dannel Malloy and New Jersey Gov. Phil Murphy.

All three are Democrats, and they ripped the federal tax law, saying it is targeted at wealthy states in the Northeast — which had already given back billions more in tax revenue to Washington than it gets in return.

"This is an assault on those states," said Malloy. "I believe it is illegal. It is why we are standing up and saying this can’t happen."

Jan. 3: Cuomo: New York to sue over federal tax law

Dec. 28: IRS to property tax prepayers: Not so fast!

Dec. 27: Some homeowners see prepaying property taxes as way to save this year and next

The new cap on deductions for state and local taxes was one of the ways Congress tried to offset the cost of lowering rates and eliminating other taxes as it wrote the tax bill that was signed into law last year. Combined with new limits on the mortgage interest deduction, the $10,000 cap on state and local deductions was expected to generate an additional $668 billion over the next 10 years, according to the Joint Committee on taxation.

Murphy said states need to fight back against the Republican policies in Washington.

The governors said they are formulating a plan on how and when to file a lawsuit.

"It has nothing to do with sound policy. It is clear: It is punishment," Murphy said.

Contributing: Herb Jackson, The (Bergen County, N.J.) Record. Joseph Spector writes for the Gannett Albany (N.Y.) Bureau. Follow Spector on Twitter: @GannettAlbany

Dec. 27: New Jersey Gov. Chris Christie signs executive order on property tax payments

Dec. 27: Some N.J. homeowners rush to prepay 2018 property taxes before new tax law takes hold

Dec. 22: Trump signs tax and spending bills, challenges Democrats to work with him on infrastructure next

Dec. 2: New York leaders fuming over Senate tax bill

Dec. 2: Senate passes tax bill with handwritten provisions in rush to finish