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Two states, and maybe California, plan to join New York in suing to block GOP's tax overhaul

Two states, and maybe California, plan to join New York in suing to block GOP's tax overhaul
Govs. Dannel Malloy of Connecticut, left, Phil Murphy of New Jersey and Andrew Cuomo of New York said they’re talking to leaders of other states that might want to join their states' lawsuit. (Associated Press)

New Jersey and Connecticut are joining New York in planning to file a lawsuit to block the Republican-led federal tax overhaul, the Democratic governors of the three states announced Friday.

And California could join them.

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Andrew Cuomo of New York, Dannel Malloy of Connecticut and Phil Murphy of New Jersey announced Friday that they're talking to leaders of other states that stand to be hurt by the federal tax plan that's expected to cost taxpayers in their states billions of dollars.

"We're going to be working together to form a multistate coalition to challenge this in court," said Cuomo, a potential 2020 White House contender who announced his intention to fight the tax overhaul earlier this month.

Murphy said he expects the suit to be filed within weeks. No decision has been made on where the action will be filed, Malloy said.

The new tax code passed by Republicans in Congress and signed into law last month by Republican President Trump caps a deduction for state and local taxes at $10,000. That deduction had been popular in high-tax, Democratic states such as New York, Connecticut and New Jersey — as well as California — where many homeowners now face big increases in their federal tax bill.

The average deduction for state and local taxes taken by the 6.1 million California residents who took advantage of it in 2015 was $18,438, according to the Tax Policy Center. Only New York and Connecticut had a higher average deduction.

Cuomo said he's spoken with California Gov. Jerry Brown and the two states signed a cooperation agreement, which also includes New Jersey and Connecticut.

A spokeswoman for Brown declined to comment.

The California governor hasn't been nearly as outspoken as the Northeastern Democratic governors on the issue. He didn't mention it in his State of the State speech this week.

But state Senate leader Kevin de León (D-Los Angeles) has introduced legislation to try to help residents avoid the new limit by allowing some of the payments to be classified as charitable expenses.

Cuomo said the lawsuit could argue that the tax law violates states' rights and is unfair because it singles out Democratic states for political reasons.

Staff writer Jim Puzzanghera contributed to this report.

UPDATES:

1:10 p.m.: This article was updated with information about California's possible involvement in the lawsuit.

This article originally was published at 10:25 a.m.

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