united-states tax-law us-constitution new-york-state
Andrew Cuomo suing over the 2018 tax plan
<p>Andrew Cuomo (Governor of New York) is planning on suing over the 2018 tax plan, claiming it to be unconstitutional: <a href="https://www.usatoday.com/story/news/nation-now/2018/01/03/cuomo-new-york-sue-over-federal-tax-law/1001655001/" rel="nofollow noreferrer">https://www.usatoday.com/story/news/nation-now/2018/01/03/cuomo-new-york-sue-over-federal-tax-law/1001655001/</a></p>

<p>It sounds like the biggest complaint he has is the changes to the state and local tax deductions. This affects states like NY with high state taxes more than other states and might cause high earning people to leave the state. </p>

<p>Given that constitutionally congress has the power to levy taxes, does the claim that it is unconstitutional to not have a state and local tax deduction have any merit at all?</p>

<p>I see this question as asking whether the state and local tax deduction to the federal income tax is constitutionally required, which is the proposed basis of the lawsuit as stated in the question. </p>

<p>The answer is that it is not. One simple way to see this is that people who do not itemize their deductions have never been able to take this tax deduction. </p>

<p>The power of the federal government to impose taxes is not entirely unlimited under the U.S. Constitution, but it has the express power to impose an income tax, and income defined without a state and local tax deduction is not so far afield from the meaning of "income" that it ceases to be an income tax without it.</p>

<p>In contrast, denying a deduction for the cost of goods sold of a business, converts the income tax from an income tax to a sales tax and this interpretation when applied in the case of Internal Revenue Code Section 280E was held to violate the constitution, forcing a different interpretation of that section that allowed a cost of goods sold deduction, in order to make the section constitutional.</p>

<p>Therefore, the hypothetical case has little legal merit.</p>
