Cuomo Plans to Sue U.S. Government Over State Tax Break Change

(Bloomberg) -- New York Governor Andrew Cuomo said his administration plans to sue the federal government over the new Republican tax law, on the grounds that it's unconstitutional because it discriminates against New York and other states that voted against President Donald Trump.

“Make no mistake, they're robbing the blue states to give money to red states,” Cuomo said during his State of the State speech in Albany Wednesday. “It is an economic civil war. It is illegal and we will challenge it in court as unconstitutional.”

Cuomo, who described the Trump presidency as “the most hostile federal administration in history,” said the changes to state and local tax deductions in the bill will raise New Yorkers' property and income taxes by at least 20 percent. The governor added that New York state already contributes $48 billion more annually to the federal government than it gets back.

Critics of the state and local tax deduction have said the break effectively lets the federal government subsidize high-tax states. The bill signed by Trump on Dec. 22 sets a new $10,000 limit on state and local tax deductions for federal income taxes starting on Jan. 1.

The impact of the tax law “is a question of New York's economic viability long term, a question of New York's competitiveness long term,” Cuomo said. “The threat from this federal government is not going to derail the great state of New York, I promise you.”

In addition to challenging the law as unconstitutional, Cuomo said he plans to start a campaign to repeal and replace the new tax law. And, he said he's considering workarounds to respond to the changes, including restructuring New York's current income and payroll tax system, and creating new opportunities for making charitable contributions to support public programs.

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net.

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Alexis Leondis

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