Gov. Andrew Cuomo. Photo: Dominick Reuter / AFP / Getty Images

New York Governor Andrew Cuomo announced that New York, New Jersey, and Connecticut are suing the federal government over the GOP tax bill, specifically over the provision that added a $10,000 limit on state and local tax deductions. High-tax states often perceive this as an effective increase on their residents' tax burden.

Why it matters: This is the latest in a series of pitches many blue, high-tax states have been launching to try and bypass the new requirements.

Repealing income taxes and replacing them with payroll taxes on the employer-side could look attractive to high-tax states since payroll taxes are still deductible, Vox’s Dylan Matthews notes. New York’s Department of Taxation and Finance proposed a program like this earlier this month, per CNBC.

  • The downside: This method doesn’t address all income types, including capital gains and investments.

Residents could donate money to their state governments, and in turn state governments could provide them tax credits for the charitable contributions. This would act as a credit against their state income tax payments since charitable contributions are still deductible, the NYT’s Ben Casselman points out. There are proposals like this circulating in California and New York right now, per CNBC.

  • The downside: Jared Walczak, senior policy analyst at the Tax Foundation, told CNBC: "These [existing program] contributions produced an actual charitable benefit, whereas the proposals involve a pure tax swap…The IRS requires that charitable contributions have genuine charitable intent and a charitable outcome."

States are also considering shifting more taxes to corporations and away from individuals, per the NYT.

  • New sources of revenue are starting to look attractive to states as well, such as legalizing and taxing marijuana.

One final strategy blue states could employ to avoid the changes to state and local taxes: Winning back Congress.

Go deeper

SurveyMonkey poll: Trump improves, but not enough

Trump and Biden during the final debate. Photo: Xinhua/Liu Jie via Getty Images

President Trump's final debate performance exceeded Americans' expectations, but it wasn't enough to shift the dynamics that left him trailing Joe Biden across most measures, according to a new Axios-SurveyMonkey poll.

What they're saying: "Liar" was the word used most by debate watchers to describe Trump's performance, followed by "lies," "strong," "presidential" and "childish." "Presidential" was the word used most to describe Biden's performance, followed by "liar," "weak," "expected" and "honest."

Hunter Biden saga dominates online debate

Data: NewsWhip; Table: Axios Visuals

The mainstream media turned away. But online, President Trump's charges about Hunter Biden were by far the dominant storyline about the final presidential debate, according to exclusive NewsWhip data provided to Axios.

  • Coverage of business dealings by Joe Biden's son — and pre-debate allegations by one of his former business associates, Tony Bobulinski — garnered more than twice as much online activity (likes, comments, shares) as the runner-up.
Bryan Walsh, author of Future
1 hour ago - Health

America's poor health is jeopardizing its future

Illustration: Eniola Odetunde/Axios

From high levels of obesity and opioid addiction to inequities in access to care, America's pre-existing conditions make the country an easy target for COVID-19, as well as future pandemics that could cripple the United States for decades to come.

Why it matters: One of the best ways the country could prepare for future threats — and boost its economy — is to improve Americans' overall health.