Buried in the new Coronavirus relief efforts are many items of spending, like a new FBI building and more jet fighters wanted by Republicans that are unrelated to the pandemic.
But Democrats aren’t above such unrelated spending. Once politicians perceive a green light or excuse to spend money they don’t have, there are no restraints.
The following proposal caught my eye. I find it ironic that Democrats support a tax change that mostly benefits higher income taxpayers with larger homes and higher property taxes, especially given that with the higher standard deduction a property tax deduction means little for average taxpayers. But the real reasons are mentioned in the article.
From the Democratic bill passed by the House in May: Repeal the $10,000 cap on the state and local tax deduction for 2020 and 2021.
WSJ 8-5-20
In their 2017 tax over-haul, Republicans placed a $10,000 cap on the amount of state and local taxes that taxpayers can deduct from federal taxable income. Governors of high-tax states such as New York and New Jersey want Congress to eliminate the cap. Doing so would help their constituents, make it easier for them to raise state and local taxes and reduce incentives for people to move to lower-taxed states. Repealing that limit would also deliver direct tax cuts to high-income households, and the top 1% of households would get 57% of the benefits, according to the Tax Policy Center. “We need to cushion the blow of this virus. The SALT cap hurts people affected by the virus,” Senate Minority Leader Chuck Schumer (D., N.Y.) said in New York last month. “It hurts so many of the metropolitan areas like New York.”
WSJ 8-5-20
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