SALT Break Erases Most Of Democrat Tax Hike ‘On 1%’ – And AOC’s Suddenly Open To It
Democrats’ push to lift the SALT cap will erase most of the tax hikes on top earning Americans, according to Bloomberg.
The Trump-era cap imposed a maximum deduction of $10,000 on the ability to write off state and local taxes on their federal returns.
If the SALT deduction were fully reinstated, the top 1% of taxpayers — those earning at least $401,601 — would face a tax increase less than half as large as that if the current cap on the write-off were retained, according to data from the right-leaning Tax Foundation.
Those individuals would see their after-tax incomes fall 1.9% under the House Democrats’ current tax bill accompanied by a SALT-deduction restoration, compared with a decrease of 5% if the $10,000 limitation on the write-off were not expanded. –Bloomberg
Meanwhile, those in the top 5% of earners would actually see the proposed tax hikes in the House plan turn into tax cuts, while those with incomes between $165,401 and $401,600 would see their incomes rise 0.9% with an unlimited SALT deduction, vs. a 0.3% after-tax decrease if nothing changes, according to the report.
Approximately 57% of the benefits from repealing the SALT cap would go to the top 1% of earners – amounting to an average of $33,100, according to the Brookings Institution. Doing so would cost the US Treasury $88.7 billion in 2021 alone, according to the Joint Committee on Taxation, Congress’s nonpartisan scorekeeper. House lawmakers want to suspend the cap for at least two years, while some Democrats have proposed increasing, rather than eliminating, the cap.
The fight over SALT has become a key sticking point among Democrats from high cost-of-living states such as New York, New Jersey and California. Restoring the break would be a handout for the rich, which Rep. Alexandira Ocasio-Cortez (D-NY) called a ‘gift to billionaires,’ just days ago.
Yet on Friday, the socialist appeared to change her tune – tweeting in response to the Bloomberg article:
“I am open to taking a look at SALT and addressing concerns for families put under the squeeze in high cost of living areas,” adding “But a full 100% SALT repeal means major tax breaks for extremely high-net worth individuals and billionaires. Why do that?”
I am open to taking a look at SALT and addressing concerns for families put under the squeeze in high cost of living areas.
But a full 100% SALT repeal means major tax breaks for extremely high-net worth individuals and billionaires. Why do that? 🙅🏽♀️
— Alexandria Ocasio-Cortez (@AOC) September 17, 2021
Did AOC get a tap on the shoulder?
Fri, 09/17/2021 – 14:25