Gov. Dannel P. Malloy, D-Conn., has condemned a new proposed rule issued by the U.S. Department of the Treasury aimed at preventing taxpayers from dodging a new cap on the deductibility of their state and local taxes (SALT).

The Tax Cuts and Jobs Act signed into law last December limits individual SALT deductions to $10,000 per calendar year. The Treasury has sought to prevent the bypassing of the tax law with a new proposed rule that prevents charitable contributions from being used to circumvent the SALT limitation.

“Congress limited the deduction for state and local taxes that predominantly benefited high-income earners to help pay for major tax cuts for American families,” said Treasury Secretary Steven T. Mnuchin in a statement issued by his department. “The proposed rule will uphold that limitation by preventing attempts to convert tax payments into charitable contributions. We appreciate the value of state tax credit programs, particularly school choice initiatives, and we believe the proposed rule will have no impact on federal tax benefits for donations to school choice programs for about 99 percent of taxpayers compared to prior law.”

However, Malloy was not pleased by the Treasury’s proposed rule and framed the issue through a partisan spectrum.

“The Republican tax law is an affront to middle-class Connecticut families and a massive giveaway to the wealthiest individuals and largest corporations, and the guidance issued by the Trump administration today only makes it worse,” said the governor. “We already know that 83 percent of the benefits from this law go to the top one percent, while taxes actually increase for many middle-class Connecticut families – at the same time, it causes our federal deficit to explode by $1.5 trillion. Now, Treasury is attempting to take away the ability of states like Connecticut to mitigate the harmful effects of the law. We will assess our options as we work to protect Connecticut taxpayers.”