To Stop GOP Tax Bills, Some Democratic Governors May Sue

by | December 5, 2017

By Rick Karlin

Gov. Andrew Cuomo and his Democratic counterparts in California and New Jersey are exploring the option of going to court to fight the Republican tax overhaul plan -- specifically, the GOP's desire to end or greatly reduce the federal deduction for state and local taxes.

"This is double taxation and I'm not even sure it's legal, and we're going to find out whether it is," Cuomo said during a telephone conference with California Gov. Jerry Brown and New Jersey governor-elect Phil Murphy.

The measure has passed the House and Senate in different forms, which must now be put through the process known as reconciliation to arrive at an identical version that can be sent to President Donald Trump's desk.

If the measure is signed into law, Cuomo said, "the next day we are going to start the (effort to) repeal and replace the divisive tax act."

"We tear up all the floorboards, going to the fullest extent of the law to the highest levels and challenge this," Murphy said. "I'm betting there are some holes and flaws in this."

The massive tax overhaul, which the U.S. Senate approved along party lines around 2 a.m. Saturday, was completed in such haste that there were handwritten amendments scrawled in the margins of the 479-page bill.

Some Democrats complained that the notes, which would presumably be part of the new federal tax law, weren't even legible.

Cuomo and Brown had spoken together about the tax plan in an earlier phone conference. New Jersey's current governor, Chris Christie, is a Republican and Trump supporter whose term runs out at the end of December.

Under the tax plan approved by the Senate, the federal income tax deductibility of state and local taxes would be capped: Deductions of property taxes would be capped at $10,000 annually, while mortgage interest on homes would be capped at valuation of $500,000.

While that change won't have much impact in many states, New York, California and New Jersey are among those states that have a relatively higher proportion of residents living in very expensive homes.

"In our states, many people pay over $10,000 in property taxes, and those people are out of luck," said Cuomo.

Murphy added that approximately a quarter of the homeowners in New Jersey pay more than $10,000 in annual property taxes.

Cuomo predicted that if the tax plan goes through, the $1.4 trillion addition to the federal deficit it would create would cause Congress to look at cutting social programs for the poor like Medicaid.

"Step one is tax cuts for the rich; step two is drive up the debt, drive up the deficit and then come and say, 'Ooo, we have a $1.5 trillion debt!'"

Senate Minority Leader Chuck Schumer echoed those sentiments Monday.

"The bill will cause one of the greatest transfers of wealth to Corporate America and the already wealthy, while working America picks up the tab," Schumer said in a statement. "Millions of middle-class families will pay higher taxes under the Republican plan in only a few short years. Because the bill is unpaid for, the deficit will skyrocket."

Schumer said he welcomed an invite from Trump to the White House on Thursday to discuss legislation to fund the government in the face of a Friday deadline to avert a shutdown. Schumer and House Minority Leader Nancy Pelosi, D-Calif., rebuffed a similar invite last week after Trump assailed them in a Tweet that closed by saying, "I don't see a deal."

"We hope the President will go into this meeting with an open mind, rather than deciding that an agreement can't be reached beforehand as he did before the first meeting," Schumer said.

(c)2017 the Times Union (Albany, N.Y.)