Supreme Court Definitively Ends the SALT Tax Deduction Case

Jonathan Adler notes that today’s Supreme Court decision to overturn a lower court ruling upholding 2017’s federal tax deduction limits for local and state taxes was not reviewed by the Court. A GOP-controlled Congress passed the law that limits these deductions to $10,000 for individuals and married couples who file jointly and $5000 for those filing separately.  Jonathan correctly points out that this case had no merit. It was rejected unanimously by all lower court judges (all Democratic appointees).

This case has been my personal favorite since its inception. Anyone who is interested in constitutional federalism will find the claims of the plaintiffs concerning coercion and the Tenth Amendment and many other matters important. If they had succeeded, it would be a new dangerous precedent. Below is a collection of posts I have written about the topic. This first post is an analysis of the original lawsuit filed. The other posts discuss the Second Circuit and district courts rulings.

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

2. “Federal Court Rules Against Blue State Lawsuit Questioning the Constitutionality Of The Federal Tax Deduction For State and Local Tax Payments,” Sept. 7, 2019.

3.October 6, 2021, “The (Likely End) of the SALT Tax Debet Litigation,”

Even though the Courts reached the correct conclusion on this matter, I’m disappointed that Andy Grewal, University of Iowa tax lawyer and scholar “post a YouTube of”. [him]As he said, “I will eat every single page of Internal Revenue Code,” if the lawsuit was successful. 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 any restaurant of their choice.

If the lawsuit had been successful, I would be one of the few (mostly rich) Americans that could have saved money. If you’re keeping track, this is another case where my personal position on legal issues conflicts with mine.