SALT TAX FIGHT CONTINUES
January 4, 2022 - Douglas Myser
Salt tax fight continues. The SALT Tax which was implemented by President Trump, targeted wealthy coastal homes, that were in predominately blue states and voted Democratic. The idea was to tax them heavily, hoping it would cut into campaign contributions. When candidate Biden said he would end the tax, the blue states were solidly in his corner and it helped his campaign contributions. But trying to build a concensus on the Build Back Better plan has been difficult and many Republicans, and a few Democrats have been in opposition to changing the tax, as it would look like a giveaway to the Rich, the very people BIden said he would target to pay for Build Back Better. Salt tax fight continues.
Senator Bernie Sanders has been one of a group of senators eying an income cutoff, possibly $400,000 or $500,000, for taxpayers to qualify for claiming the deduction. Defenders of the House provision say it would provide needed tax relief to households in high cost areas that they say Republicans targeted in the 2017 tax law. Some Democrats also fear that the cap would limit how high states could raise their own tax raites to pay for public services, though New York and New Jersey have raised rates since the cap went into law. House Speaker Nancy Pelosi (D-Calif.) said lifting the cap will help support states finances.
The stae and local tax deduction is one of several issues in the bill that Democrats are hoping to iron out in coming weeks in the Senate, where the party will need unanimous support to approve the legislation. Sen. Joe Manchin has demanded that Democrats cut four weeks of paid leave provided in the House bill and temporary imigration protections in the House bill may run afoul of Senate parliamenatry rules. THe tightrope that President BIden is waling to try to get his coalition ready for passage has been difficult.