Post by robeiae on Apr 24, 2021 7:41:57 GMT -5
It has nothing to do with nuclear weapons, Russians, or Jimmy Carter. SALT stands for "state and local taxes." Thus, you can get a tax deduction on your federal income taxes, based on how much you paid in state and local taxes. Obviously, people in who live in States with income taxes pay more than people in States without income taxes. And people with more expensive homes pay more in property taxes than people with less expensive homes or people who rent. Under Trump, this deduction was capped at $10,000. Now, there's a push--somewhat bipartisan--to get rid of that cap: www.msn.com/en-us/news/politics/lawmakers-brace-for-bitter-fight-over-biden-tax-plan/ar-BB1g04zd
My understanding is that a number of House Repubs--from same States as the Dems involved here--are signed on, as well.
In my view, the cap is a no-brainer. The (unlimited) SALT deduction was always about helping the wealthy in the Northeast and in California, most of whom are liberal. There's no reason for it (just as there's no reason for the mortgage deduction). But it's been around so long, people imagine that it's somehow a given, that's it's justified. They have no argument why, apart from "well, I shouldn't have to pay both federal and state income taxes," which is just stupid. With the cap in place--I still think it should be wiped out altogether--it at least isn't all about helping the wealthy.
Here's a piece from Taibbi on the matter: taibbi.substack.com/p/the-heroic-congressional-fight-to
The lack of shame here rivals some of the worst on the far right. "Struggling families" Who is he kidding? The deduction is still there, it's just capped at $10,000.
And as Taibbi notes, capping SALT is probably the most liberal/progressive thing Trump did in his Presidency (apart from troop withdrawals).
FYI, here's the Brookings Institute on the matter (from 2020): The SALT tax deduction is a handout to the rich. It should be eliminated not expanded
Complicating things further, a group of House Democrats have insisted that they will vote down any proposal that doesn't roll back limits on the state and local tax deduction, known as SALT.
The GOP tax law limited the deduction to $10,000, a move that largely affected the wealthy in blue states such as California and New York.
"This issue is so critical to our state and our constituents that we will reserve the right to oppose any tax legislation that does not include a full repeal of the SALT limitation," a group of New York lawmakers wrote last week to Democratic House leaders, who can only afford to lose a handful of votes to pass legislation without GOP support.
But eliminating the deduction would raise the price of legislation by $130 billion, half of which would accrue to millionaires. Progressive Reps. Alexandria Ocasio-Cortez and Kathleen Rice were the only New York Democrats not to sign onto the SALT letter.
The GOP tax law limited the deduction to $10,000, a move that largely affected the wealthy in blue states such as California and New York.
"This issue is so critical to our state and our constituents that we will reserve the right to oppose any tax legislation that does not include a full repeal of the SALT limitation," a group of New York lawmakers wrote last week to Democratic House leaders, who can only afford to lose a handful of votes to pass legislation without GOP support.
But eliminating the deduction would raise the price of legislation by $130 billion, half of which would accrue to millionaires. Progressive Reps. Alexandria Ocasio-Cortez and Kathleen Rice were the only New York Democrats not to sign onto the SALT letter.
In my view, the cap is a no-brainer. The (unlimited) SALT deduction was always about helping the wealthy in the Northeast and in California, most of whom are liberal. There's no reason for it (just as there's no reason for the mortgage deduction). But it's been around so long, people imagine that it's somehow a given, that's it's justified. They have no argument why, apart from "well, I shouldn't have to pay both federal and state income taxes," which is just stupid. With the cap in place--I still think it should be wiped out altogether--it at least isn't all about helping the wealthy.
Here's a piece from Taibbi on the matter: taibbi.substack.com/p/the-heroic-congressional-fight-to
Josh Gottheimer, Democrat of New Jersey, made an inspired plea recently. The Harvard man and Alpha Epsilon Pi brother is a member of the so-called “SALT caucus,” a group of congressfolk threatening to hold up Joe Biden’s infrastructure bill if it doesn’t include a full repeal of a Donald Trump-imposed $10,000 cap on deductions of state and local taxes.
“It is high time that Congress reinstates the state and local tax deduction, so we can get more dollars back into the pockets of so many struggling families,” intoned Gottheimer, one of 32 members of the SALT caucus, which includes 8 Republicans.
“It is high time that Congress reinstates the state and local tax deduction, so we can get more dollars back into the pockets of so many struggling families,” intoned Gottheimer, one of 32 members of the SALT caucus, which includes 8 Republicans.
And as Taibbi notes, capping SALT is probably the most liberal/progressive thing Trump did in his Presidency (apart from troop withdrawals).
FYI, here's the Brookings Institute on the matter (from 2020): The SALT tax deduction is a handout to the rich. It should be eliminated not expanded
Here we present data, drawn from work by our colleagues at the Tax Policy Center, to show that:
Lifting the cap on the SALT deduction would massively favor the rich, with most of the benefit going to the top one percent
Lifting the cap would in fact give almost three times as much, as a share of the cut, to the top one percent as the TCJA cuts did as a whole (of course the absolute amount is very much less)
Even with the cap, the SALT deduction remains pro-rich, with around three-quarters of the benefit going to families in the top fifth of the income distribution
Lifting the cap on the SALT deduction would massively favor the rich, with most of the benefit going to the top one percent
Lifting the cap would in fact give almost three times as much, as a share of the cut, to the top one percent as the TCJA cuts did as a whole (of course the absolute amount is very much less)
Even with the cap, the SALT deduction remains pro-rich, with around three-quarters of the benefit going to families in the top fifth of the income distribution