Democrats are again considering legislation to provide their wealthy blue state donors with billions by ending the cap on a tax deduction.
As President-elect Joe Biden has released his $1.9 trillion Chinese coronavirus relief package that offers $1,400 stimulus checks to working and middle class Americans, rather than the $2,000 checks that President Trump had requested, Democrats are resurrecting their goal of providing tax breaks to the wealthiest of Americans, mostly concentrated in coastal blue states.
The plan once again being considered by Democrats on the House Ways and Means Committee would end the cap on the SALT tax deduction that was strictly limited by Trump in 2017. Ending the cap over the next two years would give millionaires and billionaires a massive windfall while costing about $136 billion.
The Daily Poster contrasted the elimination of the cap to the cost of stimulus checks:
If Democrats choose to permanently repeal the cap, it would cost almost $600 billion — or three times the amount it would cost to boost the $1,400 checks to $2,000. [Emphasis added]
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$2,000 checks would target help to the bottom 60 percent of income earners, who would see an average increase of 11 percent in their annual income, and it would be a particularly big income boost for the poorest Americans. By contrast, the SALT deduction would mostly benefit wealthy households, with the top 5 percent of households receiving over 80 percent of the benefit. [Emphasis added]
The top 1 percent of households would get roughly 60 percent of all the benefits of a SALT cap repeal, which translates to “an average tax cut of more than $33,000,” wrote Howard Gleckman of the Tax Policy Center. [Emphasis added]
In March 2020, the Committee for a Responsible Federal Budget wrote in an analysis that ending the cap would ensure that “the average household making over $1 million would receive over $100,000.” – READ MORE
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