Schumer pushes for elimination of SALT deduction cap in coronavirus relief bill

Schumer pushes for elimination of SALT deduction cap in coronavirus relief bill

Senate Minority leader Charles Schumer called on Republicans to repeal the cap on the state and local tax (SALT) deduction on federal income taxes in the next coronavirus relief package, which the lawmakers of the two parties are expected to negotiate in the near future. Repealing the $10,000 cap would overwhelmingly benefit high-income taxpayers in high-tax states.

KCooper
KCooper
Coolidge gang best gang
Coolidge gang best gang 2 weeks

All tax cuts are good tax cuts.

Pryotra
Pryotra 2 weeks

This basically benefits states with high taxes. More than anyone. It doesn't actually lower taxes, and infact will probably lead to higher taxes overall. It's like this: if you pay more than $10,000 in state and local taxes, you can deduct only up to $10,000 from Federal taxes right now, but if SALT deductions get uncapped you can deduct whatever you pay from Federal Taxes. This in turn allows these states with high taxes to advertise to the wealthy: If you live here you will never pay federal tax again. This does two things: entice the wealthy to move in, which helps pressure low tax states to raise the taxes to become more attractive to the wealthy. Meanwhile, in order to stay ahead of the curve, the high tax states will further raise taxes. Basically it removes almost all incentive outside of public pressure to maintain a lower tax rates at the state and local level, and triggers a tax race among states that need their wealthy to run the Government. Meanwhile, Federal Taxes will take a nosedive in actual intake as the wealthy deduct the amount of taxes they're already paying from Federal, forcing the Federal Government to raise taxes to maintain their income from Taxes. This is a clever way to coerce a high tax rate across the US while sounding like it will reduce taxes paid to the federal government. It's insidious, and I hope that the average American can see through this.

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