Democrats Want Middle-Class Families To Subsidize Blue-State Millionaires
‘$60,000 tax cuts for wealthy people and $10 tax cuts for the middle class. Apparently that sounds like a good trade to our Democratic colleagues. It doesn’t sound like a good trade to me…the middle-class Kentuckians I represent have zero interest in cross-subsidizing the tax bills of millionaires who live in Brooklyn and the Bay Area.’
WASHINGTON, D.C. – U.S. Senate Majority Leader Mitch McConnell (R-KY) delivered the following remarks today on the Senate floor regarding Democrats’ effort to undermine tax reform for families across the country:
“Today, Democrats here in the Senate will push forward their own resolution. It seeks to undermine part of the historic tax reform law we passed in 2017.
“Remember, back then, Washington Democrats were downright hysterical about our plan to let working Americans send less of their paycheck to the IRS. Speaker Pelosi called the tax cuts, ‘Armageddon.’ She said it was, ‘the worst bill in the history of the United States Congress.’
“Well, I guess that shows how much some Democrats hate to cut taxes. But tax reform passed, and the results are clear: It has increased Americans’ take-home pay and helped generate one of the best economic moments for working families in a generation.
“Since tax reform, 22 states – including my home state of Kentucky – have set new record low unemployment rates. The national unemployment rate has set a 50-year low. But alas, rather than acknowledge that the sky hasn’t fallen, our Democratic friends still want to undermine tax reform. And listen to where they’ve elected to start…
“Democrats’ first target is changing the tax code so that working families across the country have to subsidize wealthy people in states like New York, New Jersey, and California.
“Here’s the background. As part of tax reform, in order to maximize middle-class relief, the deductibility of state and local tax payments was capped. Most middle-class taxpayers were more than compensated for this through the other tax cuts, but for some wealthy people who elect to live in high-tax states, this represented a partial increase.
“Republicans didn’t think it was fair that middle-class working families in the states the Obama economy left behind had to subsidize the tax bills of rich people in high-tax states, without limit. We didn’t eliminate the state and local tax deduction; we just capped it for high earners.
“That cap is what Democrats want to undermine. Their resolution would help high-tax states — typically governed by Democrats — create workarounds for their high-earners.
“Let’s be clear about what would happen if Democrats got their real objective and repealed the SALT cap altogether.
“According to data from the Joint Committee on Taxation, 94 percent of the benefit would flow to taxpayers who earn more than $200,000 a year. More than half of it would actually go to people who make more than $1 million a year.
“Repealing the SALT cap would give millionaires an average tax cut of $60,000. Meanwhile, the average tax cut for taxpayers earning between $50,000 and $100,000 would be less than ten dollars.
“$60,000 tax cuts for wealthy people and $10 tax cuts for the middle class. Apparently that sounds like a good trade to our Democratic colleagues. It doesn’t sound like a good trade to me.
“I am sorry to break it to my Democratic colleagues, but the middle-class Kentuckians I represent have zero interest in cross-subsidizing the tax bills of millionaires who live in Brooklyn and the Bay Area.
“It’s bad enough that my Democratic colleagues want to unwind tax reform. But it’s downright comical that their top priority is helping wealthy people in blue states find loopholes to pay even less.
“They won’t even propose to repeal the SALT cap outright because they know it is bad policy and negates all their talking points about tax fairness. They just want to bless a backdoor workaround.
“I urge members on both sides to use common sense and reject Democrats’ resolution when we vote on it later today.”
Related Issues: Economy, Middle Class, Tax Reform