The SALT exemption allows taxpayers to deduct property and state-income taxes when filing to the federal government
Millionaires stand to benefit immensely from the treatment of state and local taxes
.As its price tag has been slashed to $1.7trn over a decade, half as much as first pitched, the hunger—or squid—games between progressives and moderates have turned fiercer. (Against united Republican opposition and with no votes to spare in the Senate, any Democratic defection would scupper the bill.) This has mostly been to the benefit of the moderates, as senators like Joe Manchin and Kyrsten Sinema have wielded their veto threats to weaken or kill some mooted carbon-emissions limits, a paid-family-leave programme and tax rises for rich Americans and firms. But a lesser-known faction, the
SALTCaucus, may have made out best of all.TheSALTCaucus is named after the “state and local tax” deduction. The exemption, which dates back more than a century, allows taxpayers to deduct property and state-income taxes when filing to the federal government. For much of its history, this exemption was limitless. That helped the well-to-do who faced big bills for their houses and incomes—and the high-income, high-tax states that received an implicit subsidy from the federal government. The subsidy cost $369bn (1.9% of
GDP) in 2017. It became less generous that year after Republicans passed legislation, signed by President Donald Trump, capping the deduction at $10,000 a year.For most Americans, this had little impact. According to the Internal Revenue Service, 87% of tax returns do not bother to itemise all their exemptions, which would amount to less than the standard deduction ($12,000 for a single filer in 2018). But legislators in high-tax states such as New York and California saw the reform not as a laudable effort to tax the rich (which it did rather well), but a punitive blow. headtopics.com
TheSALTCaucus was soon formed as a resistance movement. “This was explicitly designed to go after states that tax people to support better schools and services,” says Tom Malinowski, a Democratic congressman from New Jersey and aSALTCaucus member, who notes that in some towns in his district the average homeowner may owe $20,000 in property tax. Days before the
BBBAct’s passage in the House, the caucus secured an increase in the limit on deductible expenses from $10,000 to $80,000 for the next ten years.This constitutes one of the biggest expenditures in the pending budget bill. And it is steeply regressive (see chart). It is dividing Democrats, who may yet push for significant changes in the Senate.
Over the next five years, the newSALTprovision would cost the federal government an additional $275bn relative to current law. That is much more thanBBBplans to spend on child-tax and earned-income credits that are intended to reduce poverty. Some proponents claim that the proposal is actually deficit-neutral over the next decade, though this relies on a shifty budgetary game. The Trump-era limit on
SALTexpires in 2026, so although a cap of $80,000 costs a lot until then, scorekeepers book it as a tax increase (relative to full deductibility) from 2026 to 2031.President Joe Biden has been emphatic thatBBBis a plan to revitalise the middle class. So it is an irony, argues Marc Goldwein of the Committee for a Responsible Federal Budget, a think-tank, that one of the priciest components of it “is a big tax cut that middle-class people and poor people don’t get at all”. Almost all the benefit is concentrated among the very rich. headtopics.com
Modelling by the Tax Policy Centre, another think-tank, shows that the average benefit for the middle 20% of earners would be a measly $20. But those in the top 20% would receive an average tax cut of $2,100; the top 1% would get a cut of almost $15,000. The majority of the benefits would go to Americans earning more than $500,000 a year. Less than 9% would go to Americans making less than $200,000.
This is not just “a colossal waste of money on a regressive, distortionary tax break”, argues Richard Reeves of the Brookings Institution, another Washington think-tank, but “a form of fiscal self-harm, and, therefore, political self-harm”. Jason Furman, a former economic adviser to Barack Obama, has called it “obscene”.
The issue is inverting the usual positions on fair taxation. Mitch McConnell, the Republican leader in the Senate, is lambasting the “bonanza for blue-state millionaires and billionaires” and the fact that the bill gives “a net tax cut to 89% of people making between $500,000 and $1m”. Some pro-deduction Democrats argue that their own “maker states” deserve a break that cadging “moocher states” do not
Whether the change will become law is uncertain. For both the Democratic leaders in Congress, Nancy Pelosi of California and Chuck Schumer from New York (pictured), the provision would be a boon for their home constituencies. But some Democrats are incensed. Michael Bennet, a senator from Colorado, has called the idea “preposterous”. Bernie Sanders, another strident objector, is pushing to limit the deduction to those making less than $400,000 a year. He has not said whether he would be prepared to torpedo the whole bill over the measure. headtopics.com
The White House has been sheepish about the idea, which was not in Mr Biden’s original proposal. His press secretary recently offered this ringing endorsement: “The president’s excitement about this is not about theSALTdeduction; it’s about the other key components of the package.”Read more: The Economist »
Video: 'Once in a lifetime' rare blanket octopus spotted in Australia - CNN Video
The rainbow-hued octopus, seen swimming on the Great Barrier Reef, was caught on video by marine biologist Jacinta Shackleton.
House Democrats announce plan to fund the government, prevent a shutdownHouse Democrats are planning to bring a short-term government funding bill that would prevent a shutdown Friday night. A number of Republicans in both chambers have signaled they want to delay passage because of President Biden's vaccine mandates. The two issues are unrelated. It’s just excuse after excuse. Crazy people in office No, no, correction. Shackleford wants a pizza.
WSJ News Exclusive | Apollo to Buy Griffin Capital Units in Push to Reach Wealthy IndividualsApollo has agreed to buy the U.S. wealth-distribution and asset-management businesses of Griffin Capital, marking a step in its plan to expand offerings for wealthy individuals Mujahid life is in danger I do not want to lose my brother, he is the life of all us please do RT so that someone's life can be saved and you can save someone's life. please do RT with kindness Retweet till it reaches the right eyes. Please Rt ❤️ My son James Bonds 215403, 20 yrs in prison, and the Judge and DA said he had no involvement. Make it make sense... Help him plz.
Joshua Bassett Opened Up About Facing Sexual Abuse As A Child And Teenager'I buried it so far.'
Global tax deal leaves billion-dollar loopholes, Reuters analysis finds.Reuters analysis finds that some companies could still use Ireland to reduce their tax bills despite an October deal to establish a global minimum corporate tax rate aimed at curtailing profit-shifting to lower-tax jurisdictions via tombergin_News
Fourth stimulus check update: Some Americans will be eligible for $1,400 payment in 2022Payments will be issued after a person files taxes in 2021. No they will not. It's a lie. No one operating the government has authority to issue a 'stimulus' to anyone. God In other words, he's spent all our money and needs to collect more money from us, before he can give back us our money so he can brag and pretend that he's a generous president taking care of our people. Printing more money. Perfect.
'High School Musical' Star Joshua Bassett Reveals Past Sexual Abuse“I didn’t remember that until last year, which is pretty insane,' the Disney+ actor told GQ. 'I buried it so far.” 계속 죄를 짓는다면 하나님의 성령 안에 머물 수 있는 방법은 없습니다 GrandMenengaiFour that is sad