Supreme Court Definitively Ends the SALT Tax Deduction Case

As Jonathan Adler points out, today the Supreme Court refused to review a lower-court decision upholding the 2017 tax law’s caps on the federal tax deduction for state and local taxes. The law, enacted by a GOP-controlled Congress, limits this $10,000 for individual taxpayers and married couples filing jointly, and $5000 for married people filing separately.  Jonathan rightly notes that the case never had much merit, which is why it was uniformly rejected by the lower-court judges who considered it (all of them Democratic appointees).

I have followed this case from its inception. The claims the plaintiffs raised about coercion, the Tenth Amendment, and other issues, are important for anyone who follows constitutional federalism issues, and would have set a dangerous new precedent had they succeeded. Here is a list of my posts about it. The first is a critique of the lawsuit when initially filed, while the others consider the district court and Second Circuit rulings on the case:

  1. Four Blue States File Dubious Lawsuit Against Cap on Federal Tax Deduction for State Tax Payments,” July 19, 2018.

2. “Federal Court Rules Against Blue-State Lawsuit Challenging Constitutionality of Cap on Federal Tax Deduction for State and Local Tax Payments,” Oct. 7, 2019.

3.”The (Likely) End of the SALT Tax Deduction Litigation,” Oct. 6, 2021.

While the courts reached the correct decision on this, I am disappointed we won’t get to see University of Iowa tax law scholar Andy Grewal “post a video of [him]self eating every single page of the Internal Revenue Code, one-by-one,” as he promised to do, if this lawsuit had succeeded. I myself need not make good on my pledge to use my SALT tax deduction savings to buy the four state attorneys general behind the suit a free dinner at a restaurant of their choice.

I’m part of the small minority of (mostly wealthy) Americans who would have saved money had the lawsuit succeeded. For those keeping score, you can add this to the list of cases where my position on a legal issue conflicts with my self-interest!

Today’s airplane mask mandate decision (about which I hope to write more later) is likely another example. See also my earlier analysis of the issues raised by the latter litigation.

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