Most Millionaires Would Get a Tax Cut Under House BBB plan

[Tomconroy]

https://www.politico.com/news/2021/11/11/millionaires-tax-cut-dems-plan-521004

Lifting that SALT tax threshold is a bad idea.

[Calista241]

1. Yup, keep it where it is.

Hard to believe we’re about to pass a tax break for the rich bill.

[Demsrule86]

10. This is how Trump punished blue states. It needs to go.

[liberalgunwilltravel]

17. Increase the limit on SALT deductions then

The Blue states already subsidize the Red state. The net effect of limiting the SALT deductions increases that subsidy to states that refuse to tax their residents sufficiently to pay for needed services. The SALT deduction limits hit many middle income people in Blue states hard and as already been said, the limits were put in place specifically to harm Blue state residents.

[Calista241]

33. I could support doubling the SALT cap to 20k

But the proposed 72k or 80k compromise seems out of whack and WAY too high. Who has the best part of $100k in state and local tax payments? Those state tax obligations are way, way more than the median gross income for most Americans.

And i'm sorry, if you want to have a several million dollar house or apartment in a high tax city, then you have to pay. The rich must pay. Period.

[Tomconroy]

2. The Tax Policy Center is a non partisan group dedicated to

Making our tax system fairer. It was founded by Len Burman, a former Asst. Sec. in the Clinton Treasury Dept.

[lapucelle]

8. And here's what the Tax Policy Center said in the article Politico cies:

Build Back Better 2.0 Still Raises Taxes For High Income Households And Reduces Them For Others

In a new analysis, the Tax Policy Center estimates that the major tax changes in the latest version of President Biden’s Build Back Better plan would cut taxes on average for nearly all income groups in 2022. The exception: Those in the top 1 percent, who will make about $885,000 or more. They’d pay about $55,000 more than under current law. Those in the top 0.1 percent, who make about $4 million and up, would pay an additional $585,000 on average, a 5.9 percent reduction in their after-tax income.

https://www.taxpolicycenter.org/taxvox/build-back-better-20-still-raises-taxes-high-income-households-and-reduces-them-others

----------------------------------------------------------------------------------------------------------
Politico's click bait headline is misleading. The editor slipped this in as a picture caption.

Overall, Democrats’ plan would increase taxes on the well to do while reducing them for average Americans.

I wonder if that was the article author's original headline.

[Tomconroy]

14. The bill could still lower taxes for most without the SALT

provision.

[lapucelle]

16. "Sorry, you're being left behind again because the optics of restoring tax justice

to the middle class families in blue states don't work for our brand" is the type of message that's going to continue to hurt Democrats.

[quakerboy]

3. can we track who put that in?

Whos idea was it?

[Tomconroy]

4. I read it but forget specifically. New Jersey congress

People maybe. But it somehow seems to have become consensus.
It's a Northeast issue where real estate taxes are quite high.

[lapucelle]

12. Jamie Raskin, Tom Suozzi, Josh Gottheimer, Mikie Sherrill, Lauren Underwood, Brian Higgins,

Tom Malinowski, Bill Pascrell, and Mike Levin, among others.

[lapucelle]

7. Here's Jamie Raskin's statement.

Representatives, Union Leaders Call for Repeal of Cap on Salt Deduction that has Unfairly Targeted Unions
Repeal of SALT Cap Remains a Top Issue for Union Families and High Cost of Living States with Progressive Policies

WASHINGTON, DC – Today, Representatives Tom Suozzi, Josh Gottheimer, Mikie Sherrill, Lauren Underwood, Jamie Raskin, Brian Higgins, Tom Malinowski, Bill Pascrell, and Mike Levin were joined by union leaders to make an urgent call on the need to repeal the cap on the State and Local Tax (SALT) Deduction.

Joined by Randi Weingarten, president of the American Federation of Teachers, and representatives from firefighter and teacher unions, the attendees highlighted how the cap has resulted in a tax increase for union families. In high cost of living states like New York, for example, an average family with a firefighter and teacher makes $165,000. In New York, for example, 85.7% of filers who make in between $100,000-$200,000 claimed the SALT deduction for an average of $15, 859. When the cap was repealed, they saw a tax increase of $5,000.

Beyond the SALT cap resulting in a tax increase for the union members, it has also hurt progressive policies by promoting a race to the bottom where wealthy taxpayers are leaving high-cost of living states. When this happens, it results in middle class and low-income families left holding the bag or a cut in funding for vital programs – like the services these union workers provide.

snip============================================================================

“When he instituted the first state and local tax deduction at the federal level, President Lincoln said that it made no sense to tax things twice, but that’s what’s happening with this SALT deduction cap,” said Rep. Raskin. “The $10,000 cap imposed by the 2017 tax law has short-changed hardworking middle-class families, including half of all taxpayers in Maryland's 8th District where the average deduction reaches approximately $19,000. I’m glad to be part of the bipartisan group working to change this regressive policy for all the teachers, civil servants, firefighters, engineers and businesspeople who have been hit so hard by this terrible policy change from the 2017 law.”

https://raskin.house.gov/2021/6/representatives-union-leaders-call-for-repeal-of-cap-on-salt-deduction-that-has-unfairly-targeted-unions

[BeyondGeography]

22. That's all anyone here needs to read

Between state income and local property taxes the $10k cap is easily exceeded by a lot of families who aren’t raking it in (raises hand). It’s embarrassing how many here fall for the SALT deduction as a rich man’s benefit. The cap is nothing more than classic mean-spirited Trumpism, penalizing blue states and their citizens who don’t vote for him and, by extension, Republicans.

[Raven123]

5. The tax system is so complex that any single change will have unintended consequences

The question is whether the overall plan will decrease inequality. Whenever I see these articles I admit I am automatically suspicious. I wish the article was longer and put the provision in context. So many in the media want to generate outrage that it seems they search out these bits and pieces.

[betsuni]

6. No. Wrong.

[Demsrule86]

9. No it is not. It was put into effect to hurt blue states that have high taxes on even modest

homes.

[Tomconroy]

11. Maybe the phrase should be 'Untax the Rich'.

[lapucelle]

13. "Overall, Democrats' plan would increase taxes on the well to do while reducing them for average

Americans."

At least according to the Politico article you cite and the Tax Policy Institute.

[Tomconroy]

15. It would increase taxes on the wealthy.more without the

SALT provision.

[lapucelle]

18. "Sorry, you're being left behind again because the optics of restoring tax justice

to the middle class families in blue states don't work for our brand. Besides, I fund raise nationally so what's good for my district and middle class blue state families in general is secondary to brand messaging" isn't going to help the middle class families that were hard hit by this SALT tax deduction cap.

[Tomconroy]

19. That's stretching the definition of middle class a bit if

You are paying 79000 in real estate taxes.
20000 maybe might cover the upper middle class. Maybe.
This provision was written to benefit a certain set of people. Not the middle class.

[lapucelle]

25. I'm a middle class homeowner in a blue state and the SALT deduction cap hurt me, my family,

and my neighbors. My blue county flipped red two weeks ago, in part because of taxes.

It might be an abstraction and an opportunity for on-brand talking points to some, but it's reality to me.

[Tomconroy]

26. I live in the northeast too, but you and I don't pay $80000 a

Year in real estate taxes. Very few do and they don't need that deduction. They have other ways to get creative with their taxes.

[lapucelle]

28. What makes you think that this only impacts property taxes?

The cap applies to all state and local income and sales taxes.

One of your senators is hammering out the deal, and even the junior senator from VT and the chair of the CPC are on board.

Who benefits from talking points that divide Democrats? For whom does this talking point become fund-raising fodder?

Cui bono?

[Celerity]

20. the solution is simple, raise the level of the SALT cap, just not too high to the point

that you are are giving $324 BILLION (54% of the $600 billion in tax breaks) straight to the top 1 per cent richest Americans. The top 1%'s net worth threshold STARTS at $11.1 million, and likely is more now.

How can we as Democrats defend THAT, whilst at the same ripping and gutting the social safety net and lower income level assists that are/were in the BBB? Especial if that gutting and shredding ($3.8 trillion and counting between the BIF and the BBB) is hypocritically done under a model of Manchinian crocodile tears of concern over 'fiscal responsibility'.

Find a happy medium level, it is not that hard at all to do. A cap limit of $30K or even $40K should be close to that happy medium. That is still raising the cap by 300% or 400%, hardly a minuscule raising at all.

Manchin and Sinema and the centrist/conservative/moderate House members have torn out funding mechanisms, cost reduction mechanisms (pharma price negotiation for instance), and added tax breaks or blocked tax increases for the wealthy and the huge corporations totalling to a bit over $2 trillion now (maybe more).

That is MORE than the entire current topline BBB number of $1.75 trillion. Even if Sinema allows a full half (so $200 billion instead of $400 billion in savings) of the pharma price piece to be allowed, the rest of the regressive moves still, STILL total to more than the entire topline number atm for the BBB.

[Tomconroy]

21. Agree.

[Celerity]

23. I think some are reading your OP as saying no cap raise at all, which is why they are objecting

I think it is too low myself, but I do not advocate giving hundreds of billions in tax breaks to the richest 1% just so we can say we also helped (and rightly so) the middle class.

[Tomconroy]

24. I know some rich people but I don't know anyone who

Pays $80000 in real estate taxes. I was surprised when I heard that number.
PS I had to mention Len Burman above because I knew him in college. He's a real good guy.

[lapucelle]

27. The SALT cap impacts deducting state and local income, commuter, and sales taxes

as well as property taxes.

Like I said, it's an abstraction for most. It's a lived reality for middle class blue state families.

[Tomconroy]

29. Years ago I saw a news program where people were asked

What class they belonged too. Everybody said 'middle class'.
One well dressed woman said 'middle class' then she thought about it and corrected herself: Upper middle class.

[lapucelle]

30. She defined herself. However, someone asserting any privilege of 'splaining

to people what class they "really" belong to is entitlement at it's worst.

[Tomconroy]

31. Is that you Bill Gates?

[lapucelle]

32. Wait... what? What are talking about?