As Democrats push crippling tax hikes on Main Street businesses and Middle-Class families, they are fighting for a tax shelter for wealthy Americans. “It would be unseemly to argue that we lucky few deserve a special tax break for making a lot of money and spending it on things we value. Sadly, that clearly won’t stop Democrats from trying,” Megan McArdle observes in an op-ed for the Washington Post:
“According to Maya MacGuineas of the Committee for a Responsible Federal Budget, households in the top 0.1 percent of earners would receive an average benefit of about $150,000, while those in the middle would get closer to $15. Repealing the caps would cost about $350 billion by 2026, and an estimated 85 percent of that revenue would end up in the pockets of the richest 5 percent of Americans.
“You can probably think of many better uses of taxpayer money than giving a tax break to the most affluent people in the most affluent parts of the most affluent states in the country.”
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Democrats are planning on repealing the $10,000 SALT cap before the reconciliation bill heads to the House floor.
- Most of the repeal – which could cost up to $440 billion – goes to cut taxes for individuals making more than $1 million a year.
- None goes to the 90 percent of Americans who don’t itemize their taxes, so occupants of the penthouse cheer while the building janitor gets nothing.
- Repealing the cap gives a green light to blue-state governors and mayors to raise state and local taxes even brutally higher on families and businesses.
Democrats’ tax increases hit Main Street businesses and middle-class families’ pocketbooks to offset the subsidies that they offer to the wealthy.
- Both the left-leaning Tax Policy Center and the non-partisan Joint Committee on Taxation (JCT) agree working families will see their taxes go up.
- According to the Tax Policy Center, President Biden’s tax plan will raise taxes on 75 percent of middle-class families next year, rising to 95 percent of middle-class families over the long term – contradicting his pledge not to raise taxes on middle-class Americans.
- The JCT analysis shows that more than two thirds of the corporate tax burden would be borne by lower- and middle-income taxpayers, and 172 million taxpayers would bear the burden of the increased corporate tax rate – and disproportionately harm U.S. workers, retirees, and small businesses.