Free Republic

A federal appeals court on Tuesday rejected efforts by four Democratic-leaning U.S. states to overturn former Republican President Donald Trump's decision to limit federal deductions on state and local taxes. In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan said the federal government had authority to impose a $10,000 cap on the state and local taxes that households' itemizing deductions could write off their federal returns. The decision is a defeat for New York, Connecticut, Maryland and New Jersey, which challenged the so-called SALT cap implemented as part of a $1.5 trillion tax overhaul in 2017....

As part of the Tax Cuts and Jobs Act of 2017, Republicans capped the state and local tax (SALT) deduction at $10,000. This was an important provision as it helped offset revenue losses in the least harmful way possible. Most tax-reform advocates recognize that the SALT deduction is wasteful, inefficient, and regressive. This is why Reagan tried to eliminate it as part of the 1986 tax reforms. Nonpartisan advocates of tax reform should be celebrating RepublicansÂ’ recent success in chipping away at it.This has not stopped some Democratic partisans from framing the SALT-deduction cap as part of a sinister plan...