The 2017 tax act capped SALT deductions at $10,000 for single taxpayers or married ones filing a joint tax return, and $5000 for married taxpayers filing separated. The states argued that the cap violated the Tenth Amendment, and also unconstitutionally "coerced" the states. Judge Oetken rejected both claims.Regarding the Tenth Amendment, he had this to say:
The States have cited no constitutional principle that would bar Congress from exercising its otherwise plenary power to impose an income tax without a limitless SALT deduction. In the main, they rely on the notion that the Tenth Amendment preserves states' "power to tax all property, business, and persons, within their respective limits," Thomson v. Union Pac. R.R. Co., 76 U.S. 579, 591 (1869), and so bars "improper [federal] interference with the
tates' taxing power"….. Even absent an uncapped SALT deduction, though, states remain free to exercise their tax power however they wish. To be sure, the SALT cap, like any other feature of federal law, makes certain state and local policies more attractive than others as a practical matter. But the bare fact that an otherwise valid federal law necessarily affects the decisional landscape within which states must choose how to exercise their own sovereign authority hardly renders the law an unconstitutional infringement of state power….