oh no! can this be?? the DemonKKKRats LYING about their "TAX THE RICH" mantra??
YEP
The second-biggest program in the Democrats' spending plan gives billions to the rich
https://www.yahoo.com/news/second-bi...202418744.html
Source: Tax Policy Center
Alyssa Fowers and Simon Ducroquet, (c) 2021, The Washington Post
Tue, November 16, 2021, 2:24 PM·6 min read
The House is expected to vote this week on President Joe Biden's Build Back Better legislation. The social spending bill includes investments in clean energy and affordable child care - but it also includes a $285 billion tax cut that would almost exclusively benefit high-income households over the next five years.
The measure would allow households to increase their deduction from state and local taxes from $10,000 to $80,000 through 2026, and then impose a new deduction cap through 2031. It's the second-most expensive item in the legislation over the next five years, more costly than establishing a paid family and medical leave program, and nearly twice as expensive as funding home-medical services for the elderly and disabled, according to an analysis by the Committee for a Responsible Federal Budget.
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The tax cut would partially reverse a tax hike from President Donald Trump's signature 2017 tax bill that was particularly burdensome to high-income, high-tax states. Before 2017, taxpayers could deduct virtually everything they paid in state and local taxes from their federal taxes, reducing the amount of income that the federal government could tax. The 2017 tax bill limited that deduction to $10,000 per year, creating what is known as the SALT cap.
The SALT cap created in 2017 is due to expire in 2026, after which point there would be no limit on SALT deductions. The new SALT cap provision is revenue-neutral over 10 years because it imposes a new SALT cap after the original would have expired: $80,000 for four years, and then $10,000 in 2031.
Over the next five years, raising the SALT cap would provide a tax cut only to those who itemize their taxes and pay more than $10,000 in state and local taxes - a group overwhelmingly made up of the wealthy. A recent analysis from the Tax Policy Center says the tax cut will benefit primarily the top 10% of income earners, with almost nothing flowing to middle- and lower-income families.
"Anything you do to eliminate the SALT cap is going to be regressive, because that tax is overwhelmingly paid by very high-income people," said Howard Gleckman at the Tax Policy Center. "Anything you do to lower that tax doesn't matter for most people."
The rich are poised to gain more from the SALT cap increase than lower-income people are from other elements of the bill, such as the child tax credit. According to the CRFB, a household in D.C. making $1 million a year would benefit 10 times as much from the SALT cap as a middle-class household would from extending the increased child tax credit for one year, which would provide an extra $1,600 for children under 6 and an extra $1,000 for older children.
"We're debating about whether to give lower- and middle-class families a thousand dollars more a year through the child tax credit, while giving upper-class families $10,000 or more through SALT," said Marc Goldwein, senior policy director at the CRFB. "That's counter to everything the Democrats have been saying Build Back Better is about and everything they said about the Trump tax cuts."
Raising the SALT cap would more than offset other tax increases for the wealthy in 2022, according to a report from the Tax Foundation.
Proponents of the SALT cap provision in the Build Back Better Act argue that, over 10 years, the SALT provision would actually raise revenue. That's because the new, higher cap would last for nine years and then drop to $10,000 in 2031, while the current $10,000 cap is set to expire in 2025. The maneuver pays for four years of tax cuts by adding six years of higher taxes later.
The SALT provision wasn't in Biden's original social spending and infrastructure plans or in early versions of legislation in the House. Some form of SALT relief had been under discussion since the House first took up the reconciliation bill, said Garrett Watson, a senior policy analyst at the Tax Foundation. But the measure wasn't added until November, after negotiations that lowered the cost of the bill to woo centrist votes.
"This is a touchy issue and controversial issue even among folks on the center left," Watson said. "It was inserted late in the game, perhaps because of these competing desires to make the tax code more progressive, but also to provide tax relief to certain higher-income constituencies who, right or wrong, feel like they've been treated unfairly."
The provision was added at the urging of representatives from high-tax, high-income states like New Jersey and New York, which were hit particularly hard by the SALT cap.
Rep. Thomas Suozzi, D-N.Y., one of the measure's proponents, said the $10,000 SALT cap imposed in 2017 represented a sudden change in the tax code and imposed an undue burden on his constituents, pushing some high-income residents to leave the state.
"We've made decisions for 100 years based on the tax code," Suozzi said. "In 2017, the rug was pulled out from underneath us, and now it's less attractive to live in our states." He argued that in New York, a family earning $150,000 or $200,000 a year might still be considered middle class due to the state's higher cost of living, and would benefit from a higher SALT cap.
However, the Tax Policy Center reports that about 70% of the benefit of the bill would go to the top 5% of earners in the United States, those making $366,000 a year or more. That's because, according to Watson, many middle-income earners no longer use the SALT deduction at all. Other changes in the 2017 tax bill made itemized deductions less attractive to all but high-income Americans, pushing most other taxpayers to use a standard deduction that does not take state and local taxes into account.
If the Build Back Better Act passes the House with the higher SALT cap intact, it is unlikely to pass the Senate in its current form. However, some form of SALT cap relief is likely to be in the final bill, though it may be with a lower deduction limit or an income cap.
Senior Democratic leaders are also exploring tempering the impact of the increased SALT cap by raising the alternative minimum tax, which ensures that high-income households aren't able to avoid income taxes altogether through deductions like SALT.
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The second-biggest program in the Democrats' spending plan gives billions to the rich
