Is Capping the Deduction for State and Local Taxes Constitutional?
Posted: 18 Apr 2018
Date Written: April 12, 2018
In the Tax Cuts and Jobs Act of 2017, Congress capped the deduction available for state taxes not attributable to businesses or investments, and representatives of high-tax states are challenging the constitutionality of that cap — which, they argue, was motivated by animus. This article considers several possible rationales for a challenge — intergovernmental tax immunity, political animus in general, the uniformity rule, and equal protection — and concludes that the case for overturning the cap on constitutional grounds is weak at best.
Keywords: cap on deduction for state and local taxes, animus, intergovernmental tax immunity, Uniformity Clause, equal protection
JEL Classification: K34
Suggested Citation: Suggested Citation