Four U.S. states sued the federal government on Tuesday to void the new $10,000 cap on federal deductions for state and local taxes included in President Donald Trump's 2017 tax overhaul.


David Gamage, an Indiana University tax law professor, said the lawsuit faces an uphill battle, despite suggesting that keeping the SALT deduction was a factor when states in 1913 gave Congress power to levy income taxes through the 16th Amendment.

"I think it's very unlikely that it succeeds," he said. "The Supreme Court has generally given Congress wide latitude in carrying out its taxing power, especially in setting deductions. It would be a pretty dramatic change of direction to allow this lawsuit."

In the complaint filed with the U.S. District Court in Manhattan, the four states said a $10,000 cap "effectively eviscerates" a deduction that has been on the books since 1861.

Guess liberals are no longer cheering about the Supreme Court upholding the Obamacare individual mandate as a valid "tax" a few years ago, eh? (That decision expanded the federal government's taxing power in an unprecedented way; it appears effectively unlimited now.)

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