November 4, 2021

Democrats' Priority: Tax Cuts for the Rich

Voters trying to figure out what’s in Democrats’ reckless tax and spend spree might be surprised to see plans for billions of dollars in tax breaks for wealthy Americans. Restoring the federal deduction for state and local taxes – now capped at $10,000 – remains one of Democrats’ endgame priorities. The latest iteration of their bill increases the deduction cap, retroactive to the beginning of 2021. Eliminating or increasing the SALT cap would be a disproportionate boon for rich people who live in high-tax states and cities.

  1. The Tax Foundation analyzed the effect of increasing the SALT deduction cap to $72,500 as House Democrats have proposed. The Committee for a Responsible Federal Budget outlines how the benefits of this change would overwhelmingly go to the highest earners, with 80% going to those making more than $200,000.

  2. The liberal Tax Policy Center reached a similar conclusion about the effect of repealing the SALT cap entirely. Roughly 96% of the benefit would go to the 20% of taxpayers with the highest income.

Economists across the ideological spectrum have labeled the SALT deduction “a handout to the rich” that “should be eliminated not expanded” and panned proposals to repeal the cap as “highly regressive” and sure to “weaken tax simplicity, neutrality, and fairness.”

SALT Repeal Almost Exclusively a Tax Cut for the Rich

Who Benefits from the SALT Repeal?

Democrats have loudly proclaimed their desire to tax the rich. Americans may have different opinions on that policy, but they all know the difference between a tax hike and a tax handout.

Issue Tag: Taxes