Home Politics Well, Yes, Lifting SALT Would Be A Tax Cut For The Rich

Well, Yes, Lifting SALT Would Be A Tax Cut For The Rich

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Which is, of course, why so many Democrats are arguing that the SALT deduction should be returned to being unlimited. Because the beneficiaries would be the sort of rich folks in Democrat controlled areas who have to cough up the high local and state taxes:

Key Democrats want to keep most of Trump’s corporate tax cut — and slash more taxes for the rich
Even some of the most progressive members of Congress are demanding cuts that overwhelmingly benefit wealthy

Well, yes:

Every member of the California House delegation, except House Speaker Nancy Pelosi, has called on Biden to lift the $10,000 limit on the State and Local Tax Deduction, a provision of tax law that is massively unpopular in affluent suburban areas increasingly represented by Democrats. Those California members include prominent progressives like Reps. Katie Porter and Ro Khanna, the former national co-chair of Sanders’ presidential campaign.

“Enactment of the SALT cap specifically targeted states and localities that have chosen to provide strong taxpayer support for critical government services such as education, health care, transit, and social services,” the lawmakers argued.

Every member of New York’s congressional delegation, except for Ocasio-Cortez and Rep. Kathleen Rice, D-N.Y., went further, signing a letter vowing to oppose the entire infrastructure bill unless it includes a repeal of the SALT cap. The letter’s signatories included newly-elected progressives like Reps. Jamaal Bowman, D-N.Y., and Mondaire Jones, D-N.Y.

To some extent the argument is about who gets to fleece those rich. Should it be the local politicians who use them to fund their local empires? Or should it be the Feds who use them to keep the country running?

But there are two things which are absolutely true. The first is that the SALT deduction at all is a subsidy to rich folks. Certainly any removal of the limit upon it would be. Because it means that those folks who live in high tax areas – who also itemise their tax returns, something that’s only worth doing if you are a rich folk – get a Federal tax break on their local taxes.

So, the benefit of this will flow to rich folks in Democrat areas – D because that’s where the taxes tend to be high.

The other thing it will do is de-expose those rich folks in D places to the full horrors of the taxes they’re being charged to run those progressive paradises. Currently, with the limitation, people are newly being exposed to just how high those tax rates are, the pain it causes. This is good of course, limitations on government by starving it are good.

So, we can recast this argument being made by these Congressional Democrats. We want a tax break for our rich folks so that we can soak them instead. Or, of course, we want the tax break so they don’t fund a break up of our progressive paradises…..

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4 COMMENTS

  1. Naturally I agree with the Dems. I don’t think I should pay any taxes either.

    But of course the whole point of this plan is that they should pay no taxes and I should pay them instead, (If I lived in the US, that is.)

    Since I don’t live in the US, it’ll be interesting to see whether it goes through. But it was certainly an entertaining effort by Trump to make the rich Dems pay for the policies they push.

    • Americans have an allowable deduction structure well worth investigating. For a start if you donate to a registered foundation you can deduct that donation in full, without caps AFAIK. (ISTBC.) Why all tax-paying Americans don’t do that, to starve profligate government of its vote-buying power, who knows, because the tax-payers are seldom beneficiaries of the largesse.

      An honest move by AOC. It has been noted.

  2. I don’t know why they are petitioning Biden on this. It has to be repealed by vote of both houses of Congress. Biden will sign whatever Kamala shoves in front of him.

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