Democrats may include tax cut that benefits wealthy Americans in Biden’s huge spending plan

319
SHARES
2.5k
VIEWS

You Might Also Like


– Advertisement –


SALT repeal would disproportionately benefit wealthy Americans in blue states

– Advertisement –

A coalition of moderate Democrats is aiming to repeal Trump-era limits on state and local do cut as part of President BidenKey’s signature spending plan, sparking a showdown with progressives who say doing so would result in a huge tax cut for the wealthy.

The so-called SALT deduction cap, which is set to sunset in 2026, limits the amount of state and local taxes Americans can deduct from their federal taxes to $10,000. Centrist Democrats have been pushing for months to include full repeal in the president’s $1.75 trillion “Build Back Better” plan, but have faced opposition from left-wing lawmakers.

advertisement

Bloomberg, citing a Democratic aide familiar with the discussion, is considering repealing the $10,000 cap through 2025 and offsetting the cost of doing so by imposing limits on deductions in subsequent years.

Biden pitches changes to the millionaire tax, the global minimum bill to spend

– Advertisement –

“The cap on SALT reductions is a punitive blow to our home states of New York and New Jersey as we work to recover from the pandemic and get our economies at a stronger level and our constituents back to work,” Reps. Tom Suozzi of New York and Josh Gottheimer and Mickey Sherrill of New Jersey said in a statement Tuesday.

“We will continue to work with the leadership of the House and Senate to ensure that the salt reduction limit is repealed. No salt, no deal. No salt, no dice,” the lawmakers said.

Still, eliminating the cutback limit would require Democrats to vote for a policy that disproportionately benefits wealthy Americans living in blue coastal states.

According to an analysis conducted by the Tax Policy Center, households earning at least seven points in a year will receive most of the benefits. About 25% would benefit the top 0.1% of American households, who would receive an average tax deduction of $145,000, while 57% would benefit the top 1%, who would see an average deduction of $33,100.

Bernie Sanders, I-VT, slammed reports that a SALT repeal could be included in the family and climate spending plan, calling it “unacceptable.”

“At a time of massive income and wealth inequality, the last thing we should be doing is giving more tax exemptions to the very rich. Democrats campaigned and won on an agenda that demands that the very rich eventually pay their fair share. do, not one gives them more tax breaks,” Sanders said in a statement. “I am open to a compromise approach that protects the middle class in high-tax states. I will not support more tax breaks for billionaires.”

With a 50-50 Senate majority at its lowest, it would be reasonable for Sanders to ditch a spending package that includes a full SALT repeal.

House Ways and Means Committee Chairman Richard Neill, D-Mass., told reporters Tuesday that discussions on the extent of the cuts are ongoing.

Biden did not include the SALT repeal in the framework unveiled last week, but the White House has previously said it is open to eliminating the cut cap.

“It’s not going to increase revenue and so it will add cost and potentially significantly to a package,” the White House press secretary told reporters over the summer. “There has to be a discussion about how to get paid for what’s taken instead. And then there’s a discussion of what’s most important to achieve our broad objectives.”


– Advertisement –

Related News

Next Post

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending News