President Donald J. Trump meets with House Speaker Nancy Pelosi and Congressional leadership Wednesday, Oct. 16, 2019, in the Cabinet Room of the White House. (Official White House Photo by Shealah Craighead)
How will Democrats, especially Nancy Pelosi, explain their expansion of the state and local tax deduction (SALT) for largely affluent taxpayers in mainly Blue states?
As the WSJ explains: It’s a raw exercise in political and economic hypocrisy.
This is a giant political payoff to House Democrats from New York, New Jersey, Illinois and California so they vote for the Sanders-Pelosi $4 trillion tax and spending bill.
No Press Conference, No Fanfare; No Debate?
Democrats didn’t want to let this embarrassment rot in the sun for too long, so they kept SALT out of the House Ways and Means tax measure. Instead, they’ve now stuffed it into the reconciliation bill at the last minute, literally hours before a vote, with no press conference or fanfare, much less debate.
A Screaming Advertisement for Tax Unfairness
In 2017 before the GOP imposed the $10,000 cap, New York, Connecticut, New Jersey, California, Massachusetts and Illinois were among the SALT deduction’s biggest winners, with filers writing off an average of $17,295 from their federal tax bills. Taxpayers in states like Texas and Florida with no personal income tax benefit far less.
SALT Benefit Accrues to the Affluent
Almost all benefits would go to taxpayers in the top 20% of the income scale. The Penn Wharton modelers estimate that only 9% of taxpayers in the bottom 80% of tax filers would get a tax cut. But some 83% of taxpayers in the top 0.1%—folks making more than $2.5 million—would get one, averaging $16,195.
The Pelosi SALT Tax Scheme: Income Redistribution
The Tax Foundation’s model gets similar results, with 87.6% of taxpayers earning more than $1 million getting a tax cut. Filers earning more than $250,000 would get 70% of all the tax savings from the Pelosi SALT scheme.
This is simply an income redistribution ploy to buy the votes and campaign dollars of the affluent residents of big cities and suburbs.
Next time you hear Democrats yelping about income unfairness, tell them to eat SALT.
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