SALT Deduction Cap to Get 'Meaningful' Fix, Democrats Say

[Yo_Mama_Been_Loggin]

(Bloomberg) -- House Democrats said they will “undo” the $10,000 cap on the federal deduction for state and local taxes, after the Ways and Means Committee didn’t address the tax break in a package of proposals released Monday.

Ways and Means Chairman Richard Neal in a joint statement with Representatives Tom Suozzi of New York and Bill Pascrell of New Jersey said the committee’s tax plan was not the final step for legislation to enact President Joe Biden’s agenda. They called the SALT limit enacted in the Republican’s 2017 tax law “short-sighted.”

“We are committed to enacting a law that will include meaningful SALT relief that is so essential to our middle-class communities, and we are working daily toward that goal,” the lawmakers said.

The lawmakers didn’t say how they would alter the deduction or when it would be included in legislation. In 2019 Suozzi sponsored legislation that aimed to double the cap to $20,000 that year for married couples filing jointly, then temporarily repeal the cap for the following two years. Those changes would only have applied to people making under $100 million a year.

https://www.msn.com/en-us/news/politics/salt-deduction-cap-to-get-meaningful-fix-democrats-say/ar-AAOoJzu

[PoliticAverse]

1. "Restoring the full deduction would cost the U.S. Treasury $88.7 billion in lost revenue for 2021"

[dsc]

2. but this is one I don't have a massive problem with

since the feds refuse to provide even basic anti poverty measures leaving it to the states, meaning that states have to have high taxes to provide those services. I don't have a massive problem with having those be deductable.

[PoliticAverse]

3. The Federal government operates at a large deficit. Every dollar less in tax revenue means...

a dollar the Federal government needs to borrow.

States are not units of the federal government. Why should what a state decides to spend reduce taxes owed to the Federal government?

As to the SALT deduction specifically, it mainly benefits the rich:
https://www.brookings.edu/blog/up-front/2020/09/04/the-salt-tax-deduction-is-a-handout-to-the-rich-it-should-be-eliminated-not-expanded/

Lifting the cap on the SALT deduction would massively favor the rich, with most of the benefit going to the top one percent.

[dsc]

4. but it is writing off taxes paid to states

letting high tax states stay competitive with low tax ones.

[fescuerescue]

5. I really think that this is one of those tax breaks for the rich

But because it was aimed at the Blue states, the left and right switched positions.

I make a pretty good income, but this SALT limit didn't affect my taxes in the slightest.

I'm just not rich enough for it to make a difference.


It's one of those rare instances where the left is pushing a tax break for the rich, and the right is fighting against it.