Included in the proposed $1.9 trillion stimulus bill Democrats are pushing is a repeal on the State and Local Tax (SALT) deduction limit that was passed under President Trump in 2017 under the Tax Cuts and Jobs Act. In this act, the amount of state and local taxes filers could deduct on the their federal returns was limited to $10,000. The elimination of this cap would end up benefitting the richest of the rich in the country.
The $1.9 trillion COVID-19 stimulus package supported by President Biden includes a measure that would disproportionately benefit the richest Americans — those in the top 5% of income — by giving them tax breaks, while also rewarding state governments that overtax and overspend, economic experts told Just the News.
By eliminating the cap on the State and Local Tax (SALT) deduction, Biden’s plan would benefit rich Americans in places like New York (home to Senate Majority Leader Chuck Schumer) and California (home to House Speaker Nancy Pelosi).
Among other things, the Biden bill would repeal the part of the 2017 Tax Cuts and Jobs Act that caps the SALT deduction at $10,000. Tax experts at the Tax Policy Center estimated in 2018 that repealing the $10,000 SALT limit would primarily benefit families in the top 5% of income earners around the country.
The Center reported that more than 82% of the benefits of the policy would flow to households in the 95th to 100th percentile of cash income, with households in the top 1% receiving an average tax break of $31,380 and households in the top 0.1% pocketing an average $142,590 in tax relief. (emphasis added)
Brandon Arnold, executive vice president at the National Taxpayers Union, told “Just the News AM” television program, “It’s the wealthy Silicon Valley millionaires and billionaires that are going to stand to benefit from this, at the cost, of course, of huge deficits, of huge debt.”
Just the News, “Biden stimulus bill: tax relief for wealthy, subsidies for high-tax states, critics say”, 2/19/21
The states benefitting most from this repeal are the Democrat strongholds, including New York, New Jersey, Connecticut, Hawaii, and California with its Big Tech giants.
As Brian Riedl, senior fellow in budget, tax, and economics at Manhattan Institute for Policy Research is quoted in the article, “Even Republicans would not dare propose a tax cut so tilted to the wealthy. For all their rhetoric about helping the poor, House Democrats are truly prioritizing their upper-class voter base.”
Indeed.
Pot Full of Frogs 