Tax Breaks for the Wealthy?
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https://thehill.com/policy/finance/580860-democrats-at-odds-over-salt-changes
Democrats in the House and Senate are clashing over how to address a tax break that has a disproportionate impact on a number of blue states.
Democratic lawmakers in both chambers want to make changes to the $10,000 state and local tax (SALT) deduction cap, a GOP creation, as part of their sweeping social spending and climate change legislation, but they have chosen different tactics: The House proposes substantially raising the level of the cap, while key senators back exempting taxpayers under a certain income level.
Reaching a resolution will be necessary before Democrats get a version of the budget reconciliation package to President Biden’s desk.
Republicans passed the $10,000 SALT deduction cap as part of their 2017 tax law, as a way to help offset the cost of tax cuts elsewhere in the bill. The cap is currently scheduled to expire after 2025.
The cap has long been disliked by politicians in high-tax states such as New York, New Jersey and California, who argue that the limit hurts their residents as well as the states’ abilities to provide services. But the cap is a tricky issue for Democrats because analysts across the ideological spectrum have estimated that fully repealing it would cost hundreds of billions of dollars and largely benefit high-income households.
Democrats waited for months to publicly release proposals about how to address the SALT deduction in the spending package, only beginning to do so last week.
The most recent version of the House’s bill would raise the cap from $10,000 to $80,000, holding it at that level through 2030. The cap would then revert back to $10,000 for 2031.
The proposal is estimated to raise about $14 billion over 10 years, House Ways and Means Committee Chairman Richard Neal (D-Mass.) says. Neal described the negotiations around the SALT issue in the House as challenging and emotionally fraught.
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I’ll take it thank you very much.
I’m old enough to remember when the GOP thought we shouldn’t have to, as they phrased it, “pay taxes on our taxes”.
