Photo of Erik Jensen

Caps on deductions for state, local taxes unconstitutional? CWRU law professor calls the argument ‘weak, at best’

As part of its Tax Cuts and Jobs Act of 2017, Congress capped the personal deduction for state and local taxes at $10,000. Previously, there was no maximum deduction.

Erik Jensen, the Coleman P. Burke Professor Emeritus of Law at Case Western Reserve University, said that despite claims to the contrary, the move wasn’t all about simplifying the tax code.

He outlined his opinion in an article for the Journal of Taxation of Investments, where he also serves as editor-in-chief.

“In general, high-tax states are Democratic and lower-tax states are Republican,” he said. “Already in three states (New York, New Jersey and Connecticut), governors are challenging the constitutionality of the cap.”

Part of their argument is that the Republican-controlled Congress placed the measure in the bill as a sort of political retribution against the blue states.

In legal terms, it’s called “animus.”

However, Jensen said while he may personally disagree with the cap, he believes that overturning the issue on constitutional grounds is “weak at best.”

“Not everything that people think is unfair is unconstitutional,” he said. “And, on the flip side, because something is Constitutional doesn’t make it fair.”

Jensen notes that the change won’t matter much to most taxpayers—if at all. The Tax Cuts Act raised the standard deduction to $24,000 for a married couple.

Additionally, those subject to the alternative minimum tax are unaffected because state and local taxes aren’t deductible for AMT purposes anyway, he said.

Other legal arguments for challenging the bill—intergovernmental tax immunity, the so-called uniformity rule and equal protection—don’t hold water, he said.

“The practical consideration is that courts are inclined to defer to what Congress has done,” Jensen said. “If you’re unhappy with the legislation, the answer lies with Congress. That’s why we vote.”

For more information, contact Colin McEwen at