The rotten center of the infrastructure debate

[DonViejo]

Ryan Cooper

President Biden's pandemic rescue package money is going out, and the Democratic Party is turning its attention to its next package of legislation. This is reportedly going to be a big package of mostly infrastructure, costing something like $4 trillion over a decade, counterbalanced by $3.5 trillion in tax hikes on the wealthy — aiming "to confront global climate change, rebuild the nation's infrastructure, revive domestic manufacturing, and transform U.S. child care, among other goals," reports Jeff Stein at The Washington Post. Moderates like Sen. Joe Manchin (D-W.V.) have been signaling for weeks now that they consider the tax hikes to be an essential part of any package in order to avoid borrowing too much.

But now other moderates are already starting to fuss over the scale of the proposal, and particularly the tax hikes. Rep. Scott Peters (D-Calif.) told Axios that increasing the headline corporate tax rate from 21 percent to 28 percent was too much, and instead it should be only 25 percent. Reps. Josh Gottheimer (D-N.J.) and Rep. Tom Suozzi (D-N.Y.) not only fretted about tax hikes, but also demanded a big tax cut for the rich — namely, the restoration of the federal deduction for state and local taxes (or SALT), which was capped in the Trump tax cuts. "No SALT, no dice," said Gottheimer. (Senate Majority Leader Chuck Schumer has been asking for this as well for years.)

In short, Democratic moderates are holding climate policy hostage to get a tax cut for the rich.

The SALT deduction is a good window into the politics of Democratic moderates in blue states. The SALT cap stipulates that tax filers can now only deduct $10,000 in state and local tax payments from their income for the purposes of federal tax liability. For instance, if you live in New York City, you used to be able to write off whatever you paid in taxes to the state and city governments, thus reducing your federal taxable income and your tax bill, but after the Trump tax cut in 2017, now you can only write off 10 grand.

more
https://theweek.com/articles/974522/rotten-center-infrastructure-debate

[The Magistrate]

1. Mr. Cooper, Sir, Is An Ass

The removal of state tax deductibility was a Republican attempt to pressure 'blue state' governments to reduce taxes overall, which would necessarily require reductions in services, by getting the better off residents to protest the increase in their tax bills to the Federal government.

It was and is a shabby piece of bullshit that ought to be gone so quickly as to leave a distinct 'plop' of imploding vacuum where it once was.

[The Wizard]

3. +1

$10,000 property tax in NJ is average and far from wealthy.

[blm]

6. ✔️

[CoopersDad]

2. Trump took away my home office deduction, in his "tax cut" plan.

Fuck the rich and fuck anyone who wants to protect their wealth.

Shame on Peters, Suozzi, and Gottheimer.

[lagomorph777]

4. "big tax cut for the rich -- ... federal deduction for state and local tax" BULLSHIT

Eliminating SALT deduction was a deliberate attack on the middle class in blue states.

theweek.com looks like a RW rag (unsurprising to me).

[JT45242]

5. SALT limit isn't a benefit for the rich, it hits middle class folks primarily in blue states

In states like Texas and Florida with no state income tax, this plays well.

But if you live in CA, NY, etc. where you have high property tax and a state income tax, middle class folks got squeezed.

Don't play this like the elimination of SALT was a cut for the rich, this was a way to screw voters in Blue states to give money to rich republikkkan donors.