Since Donald Trump became president, New York State has filed more than 100 lawsuits against the federal government. This includes those filed by both Attorney General Eric T. Schneiderman and Gov. Andrew Cuomo. It does not include lawsuits filed by the City of New York. Most of them are political in nature, filed to please the plaintiffs’ voting base. In the real world, if we had filed them, they would be called frivolous. Going in, both Cuomo and Schneiderman know these have no chance of victory.
As this is a very blue state, many people cheer these lawsuits, saying, “We’ll show President Trump who’s boss!” It is a shame they do not realize we pay for those lawsuits. Many times, we are on the hook for court costs for both sides. The only people who benefit from these suits are Cuomo and Schneiderman and their political fortunes. We, the taxpayer, are left holding the bag.
• Cuomo, in a fit of vanity, orders “I Love New York” signs placed along our highways. The federal government says the signs are not legal. Cuomo put up more. The federal government says, “Take them down or we will withhold tens of millions of dollars in highway funds earmarked for New York.” New York relents and orders them taken down. The cost of the signs and their removal was $8 million to $10 million.
• New York has refused more than 1,582 ICE detainer requests to date. Then, the federal government threatened to withhold tens of millions of dollars earmarked for security. So, New York sues the federal government. Courts have ruled the Trump Administration cannot withhold funds earmarked from a prior administration. However, the courts will not rule that the federal government must provide future funds. New York will lose this suit and have to pay court costs.
• New York sued the EPA for not doing enough to stop air pollution from other states from drifting into our air. New York City sued oil companies for causing global warming. New York threatened to pull investment dollars from oil companies. It is your pension dollars they are playing politics with. If the pensions do not show a certain return, we, the taxpayers, are on the hook for the difference. Causing oil companies to lose market shares to score political points is NOT in the interest of New Yorkers invested in the market. It is only in the interest of politicians looking to score points with their base.
• Now, New York, along with New Jersey and Connecticut, are suing the federal government over the new tax reform. They argue that the $10,000 state tax cap violates the Constitution. They argue it violates the equal protection clause of the Constitution. This is all nonsense at our expense to fool high-income earners that they will get relief from the courts. This way, they will not pick up and leave for friendlier tax states.
New York and the other states will lose and also be on the hook for court costs because, according to the 16th Amendment, which empowered the federal government to tax income, states, “The burden does not have to be apportioned among the states in any particular way.” In other words, federal deductions of state and local taxes are NOT protected rights. The Supreme Court has already ruled that deductions of any kind are a “legislative grace” and totally up to Congress. The deduction for solar panels benefits states like Hawaii and California more than southern red states.
Since its enactment, the federal tax code has been used by the party in power to pick winners and losers. We call them loopholes. Elections have consequences. When the Democrats controlled Congress, they pushed deductions that benefited their voters. Why is anyone surprised that a Republican Congress would push deductions benefiting their voters?
The fact is, most of the readers of this column will pay lower taxes. Only 34 percent of you itemize your taxes. With the near doubling of the standardized deduction, fewer will. For many of those who will still itemize, the lowering of rates and other changes will surely offset the cap. Yes, some will see a tax increase, but even here in New York, most will not. That is a fact.
This is what I say. What say you?