Connecticut and three other states continued their battle Tuesday against federal income tax changes that punish states which voted against Donald Trump in the 2016 presidential election.
Connecticut filed another lawsuit Wednesday in its battle against federal income tax limits aimed primarily at those states that voted against President Trump in 2016.
The Democratic governors of Connecticut, New York and New Jersey said Friday they will file a lawsuit challenging the constitutionality of new federal income tax laws restricting state and local tax deductions, a change that primarily falls on a dozen states that voted against President Trump in 2016. “Somebody has to stand up and say, ‘Not at this time. You can’t do this. It is fundamentally unfair and illegal,” Gov. Dannel P. Malloy said.
Now that Congress has passed a massive federal tax overhaul, political observers here agree it could have a chilling effect on future proposals to raise the Connecticut income tax — even 14 months from now when a huge deficit looms in state finances. But liberals and conservatives were split over whether this is a good thing, as huge pressures are projected to test state finances in unprecedented fashion in the coming years.
Gov. Dannel P. Malloy’s administration warns the scramble to adjust to federal tax changes could produce a one-time revenue bubble here that might fool state legislators into underestimating serious problems with Connecticut’s finances.
Connecticut’s low- and middle-income households could pay tens of millions of dollars less in federal taxes each year while state officials simultaneously gain access to a wealth of new economic data. But for that to happen, according to one of the state’s leading economists, Connecticut officials first take a fiscal leap of faith – and repeal arguably the state’s most popular tax break.