Democrats are trying to roll back reforms signed by President Trump capping the property tax deductions by individual taxpayers. Pressured by their cronies from big urban centers in states like New York and California, Democrats want to make sure their Blue State pals get a special carveout in their “Build Back Better” scheme. Politico reports:
PAGING BERNIE SANDERS — About two-thirds of America’s millionaires would get a tax cut under Democrats’ current reconciliation bill plan, reports Brian Faler, a far cry from the party’s initial dreams of socking it to the wealthy. That’s according to a new Tax Policy Center analysis that attributes the shift largely to repealing the state and local tax deduction cap …About two-thirds of people making more than $1 million would see a tax cut next year averaging $16,800, the Tax Policy Center said Thursday.
That’s primarily because Democrats are proposing to lift to $80,000, from $10,000, an annual cap on state and local tax deductions.
The report is certain to inflame an already difficult fight among Democrats over what to do about the limitation, imposed by Republicans as part of their 2017 tax cuts.
Party leaders are caught between demands from colleagues representing high-tax states like New Jersey, who are threatening to sink their reconciliation plan if SALT isn’t addressed, and others complaining that will only muddle the party’s mantra of soaking the rich.
Senate Democrats are also proposing to ease the cap, though only for those earning less than $400,000, roughly.
The Politico report then goes on to claim that “Overall, Democrats’ plan would increase taxes on the well-to-do while reducing them for average Americans.” But that’s simply not proven, given what we know about how taxes grow exponentially with time the more that government programs expand.
Lots of these provisions outlined in the “Build Back Better” plan — more accurately called “Build Back Broke” — would start at the federal level but shift costs onto the states with time. What will those states do to pay for all these new goodies? Raise taxes! Everything from the gas tax to the sales tax to the grocery, personal income, and property tax, states can pinch middle and lower-class families at many pain points.
Meanwhile, this new SALT giveaway to millionaires in liberal-leaning states is part of the worst things about Washington: special interests, partisan favors, elite Beltway backscratching.
Don’t be fooled. BBB is a Trojan Horse that will further jack up inflation and hurt middle and low-income families across the country.
**Update** Rep. Jared Golden (D-Maine), the sole Democrat to vote against the House “Build Back Better” bill passed this morning (all Republicans voted against it), specifically cited the SALT provisions justifying his vote. On Twitter, he stated: “If you’d told me a year ago that the second-biggest piece of a signature bill of this Congress was *$280 billion in tax giveaways to millionaires,* I’d have told you the Republicans were in charge. Proponents have been saying that the BBB taxes the rich. But the more we learn about the SALT provisions, the more it looks like another giant tax break for millionaires. The fact that more people and orgs on the Democratic side aren’t up in arms about this is wild.”
Golden seems to forget that it was the Republicans who in 2017 blocked these tax giveaways to the wealthy–not Democrats. But otherwise, he’s totally right that the SALT provisions in this flawed “Build Back Better” bill are a form of crony capitalism for the rich.