Democrats Prepare To Stick Middle Class Americans With A Massive Tax Bill For Their Socialist Spending Spree

‘Here Comes The Biden Tax Bill’ As House Democrats Advance Over $2 Trillion In Partisan Tax Hikes With ‘More Than 40 Separate Tax Increases,’ Which Will Hit Americans Making Less Than $400,000 And Small Businesses Of All Kinds While Hammering American Employers With Higher Tax Rates Than Communist China, Yet All Of It Still Won’t Pay For Their Full Course Of Socialist Spending Plans

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “Details are already emerging about the seismic tax hikes that Democrats are cooking up. Much higher taxes on employers and job creators. Targeted tax hikes to hit small businesses and family farms. Pulling more Americans into the death tax. This tax-hiking wish list would add up to one of the biggest tax hikes in American history. At exactly the time their liberal policies already have our economy sputtering. Madam President, it’s the last thing American workers need. It’s the last thing American families can afford. And Republicans are going to fight these terrible, painful policies tooth and nail.” (Sen. McConnell, Remarks, 9/13/2021)


A ‘Washington Money Grab For The Ages’ Featuring ‘More Than 40 Separate Tax Increases’

“House Democrats this week are moving forward with their long-awaited plan to raise taxes to help pay for their next big spending package. With more than 40 separate tax increases, collectively worth $2 trillion, it would be the largest package of tax increases in decades …” (“40-Plus Tax Increases: A Rundown Of House Dems’ $2 Trillion Tax Plan,” Politico, 9/14/2021)

“The House Ways and Means Committee on [September 15th] approved a major portion of Democrats’ $3.5 trillion social spending package, including provisions that would raise taxes … The committee advanced the legislation in a near party-line vote of 24-19. Rep. Stephanie Murphy (D-Fla.) joined Republicans in voting against the measure.” (“House Panel Advances Key Portion Of Democrats' $3.5T Bill,” The Hill, 9/15/2021)

  • “The legislation approved by the Ways and Means Committee on [September 15th] includes a wide range of Democrats’ priorities…. It would raise the corporate tax rate for income above $5 million from 21 percent to 26.5 percent, raise the top individual income tax rate from 37 percent to 39.6 percent, raise the top capital gains rate from 20 percent to 25 percent and impose a 3 percent surtax on individuals’ income above $5 million. It also would provide the IRS with an additional $80 billion to strengthen tax enforcement …” (“House Panel Advances Key Portion Of Democrats' $3.5T Bill,” The Hill, 9/15/2021)

THE WALL STREET JOURNAL EDITORIAL BOARD: “Here Comes the Biden Tax Bill … [T]he bill for the Joe Biden - Nancy Pelosi -Bernie Sanders spending agenda is about to be exposed to the air. The Ways and Means Committee draft tax increase … is a $2.2 trillion Washington money grab for the ages…. As a share of GDP, the House proposal is still the largest tax increase since 1968. It also doesn’t account for the Senate Finance Committee, which has floated a paper with multi-trillions in tax increases to choose from.” (Editorial, “Here Comes the Biden Tax Bill,” The Wall Street Journal, 9/13/2021)


Democrats Are Already Proposing Tax Hikes That Would Hit Americans Making Less Than $400,000 A Year, Despite President Biden’s Pledge They Wouldn’t Pay ‘Even One Cent’ More

PRESIDENT BIDEN: “Here’s the thing you need to know: We’re going to deliver these investments without raising taxes one cent on anyone making less than $400,000 a year.” (“Remarks by President Biden on the August Jobs Report,” Washington, DC, 9/03/2021)

Democrats Are Planning New Tax Hikes, Which ‘Could Fall Hardest On Americans At The Lower End Of The Economic Spectrum’

“Millions of Americans who smoke could soon see an increase in their prices, as Democrats target tobacco and nicotine to help finance their $3.5 trillion economic package. The new proposal put forward in the House this week would raise or impose taxes on a wide array of products: It would hike existing federal levies on cigarettes and cigars while introducing new taxes on vaping. Democrats say the changes could help them raise $100 billion in revenue over the next 10 years.” (“Democrats Target Cigarettes And Vaping As Potential Sources To Pay For $3.5 Trillion Economic Package,” The Washington Post, 9/15/2021)

“Tobacco excise taxes are assessed on companies, which generally pass the expenses to consumers in the form of price increases…. The heaviest users of cigarettes and other tobacco products tend to be middle-income or lower-income Americans, federal data shows. As many as 80 percent of smokers have incomes less than $200,000 annually, according to data presented to the House Ways and Means Committee, the tax-focused panel that debated the idea on Tuesday. Other federal data shows that the greatest number of smokers are those who make at or below poverty-level wages.” (“Democrats Target Cigarettes And Vaping As Potential Sources To Pay For $3.5 Trillion Economic Package,” The Washington Post, 9/15/2021)

And The Joint Committee On Taxation Has Indicated That The Majority Of The Burden Of Democrats’ Corporate Tax Increases Would Fall On Taxpayers With Incomes ‘Well Below $500,000’

Based on an analysis from the Joint Committee on Taxation, “Increasing the corporate tax burden would disproportionately harm U.S. workers, retirees and small businesses. Within 10 years of a corporate tax increase from 21 percent to 25 percent, 66.3 percent of the corporate tax burden would be borne by lower- and middle-income taxpayers with income well below $500,000. This statistic becomes only more striking in absolute number of taxpayers.  Of the more than 172 million taxpayers who would bear the burden of the increased corporate tax rate, 98.4 percent, or about 169 million, have incomes under $500,000.” (“Analysis: Biden Tax Hikes Hit Middle Class,” U.S. House of Represenatives Ways and Means Committee Republicans Website, 8/09/2021)

  • “President Joe Biden committed not to raise taxes on anyone making less than $400,000 per year, and Democrats in Congress have reiterated that pledge, writing it into instructions for the filibuster-proof reconciliation bill. JCT’s analysis suggests there could be slightly higher taxes for those within that range at various points in the decade under Ways and Means’ proposal, although it excluded some pieces of the plan.” (Roll Call, 9/14/2021)

SENATE FINANCE COMMITTEE RANKING MEMBER SEN. MIKE CRAPO (R-ID) AND HOUSE WAYS AND MEANS COMMITTEE RANKING MEMBER REP. KEVIN BRADY (R-TX): “This study supports what we’ve long known – corporate tax hikes are primarily borne by workers and retirees, and certainly the middle class–those making well below $400,000 a year. America’s health and economic recovery remain very fragile, and may get worse again before getting better. Unemployment is still too high and inflation is a real concern. Now is not the time to raise taxes on the very people we are asking to lead us out of this crisis.” (“Analysis: Biden Tax Hikes Hit Middle Class,” U.S. House of Represenatives Ways and Means Committee Republicans Website, 8/09/2021)

THE WALL STREET JOURNAL EDITORIAL BOARD: “The political myth behind all this is that no one making less than $400,000 a year will pay more. But the economic literature is clear that corporations don’t pay taxes. They are merely the collection vessels for levies that are passed along to some combination of employees, consumers and shareholders. Much of the $900 billion will be paid in smaller wage gains for workers who are already paying a Biden tax from higher inflation. And who do Democrats think will pay the $96 billion they expect to raise from higher taxes on tobacco and nicotine—the folks who summer on Martha’s Vineyard?” (Editorial, “Here Comes the Biden Tax Bill,” The Wall Street Journal, 9/13/2021)


Under Democrats’ Deluge Of Tax Increases, American Businesses Would Pay A Higher Corporate Income Tax Rate Than Communist China

The House Ways And Means Committee Approved $2.1 Trillion In New Taxes, Including Increasing The Corporate Tax Rate To 26.5 Percent And Raising Taxes On U.S. Overseas Earnings

“The biggest set of U.S. tax increases in a generation took a major step forward on Wednesday with approval by the House Ways and Means Committee of $2.1 trillion in new levies mostly focused on corporations and the wealthy. For businesses, the legislation approved by Ways and Means would: Increase the top corporate tax rate to 26.5% from 21%... Boost taxes on overseas earnings for U.S. multinational companies…” (“Tax Hikes to Pay for Biden Agenda Approved by House Panel,” Bloomberg, 9/15/2021)

Communist China Has A Statutory Corporate Tax Rate Of 25 Percent And A Lower 15 Percent Rate For Qualified Businesses In The High-Tech Sector

“China has a basic corporate tax rate of 25% for most companies, but reductions for high-tech sectors and for investment in research and development mean effective rates can fall below 15%. Beijing will want to retain tax incentives that it sees as key for its economic development, especially in advanced technologies.” (“China’s Likely Bid For Tax Exemption Poses Risk To Global Accord,” Bloomberg, 06/09/2021)

  • “Under the [corporate income tax] CIT law, [China’s] standard tax rate is 25%. A lower CIT rate is available for the following sectors/industries on a national basis: Qualified new/high tech enterprises are eligible for a reduced CIT rate of 15%. … Qualified technology-advanced service enterprises are eligible for a reduced CIT rate of 15%.” (PricewaterhouseCoopers, Accessed 9/16/2021)


While U.S. Corporations Could Lose 1 Million Jobs From A Global Minimum Tax Being Pushed By The Biden Administration, China Is Seeking A Global Minimum Tax ‘Carve Out’

According To The National Association Of Manufacturers, A Global Minimum Tax Could Cost Up To 1 Million U.S. Jobs And A $20 Billion Decline In Investment

“The tax on Global Intangible Low-Taxed Income (GILTI) operates as a minimum tax on the foreign earnings of US multinational corporations (MNCs). … This analysis finds that the Biden Administration’s proposed expansion of the GILTI tax may adversely impact the US economy with reductions in US jobs and investment. … [P]rofessional judgement informed by this paper’s analysis and its limitations combined with the results of other somewhat similar tax policy changes suggests that plausible employment effects for the US MNCs could range somewhere between 500,000 and 1,000,000 lost jobs. A similar range for the decline in investment is between $10 billion and $20 billion.” (“The Tax On Global Intangible Low-Taxed Income (GILTI) Operates As A Minimum Tax On The Foreign Earnings Of US Multinational Corporations (MNCs),” EY Analysis, Prepared For The National Association Of Manufacturers, August 2021)

‘Beijing Now Represents The Toughest Hurdle In Talks Over The Minimum Tax… It’s Seeking A ‘Carve Out’ Or Exclusion For Domestic Profit, Which…Would Undermine The Effective Tax Rate Of 15%’

“Rich nations are bracing for China to seek exemptions from a global minimum corporate tax, a potential stumbling block for governments racing to reach wider international consensus on the plan next month. Some officials see China as not easily signing on to the global minimum tax rate of at least 15% endorsed by Group of Seven finance ministers last week, people familiar with the discussions said on condition of anonymity because of the sensitivity of the talks.” (“China’s Likely Bid For Tax Exemption Poses Risk To Global Accord,” Bloomberg, 6/09/2021)

  • “Beijing now represents the toughest hurdle in talks over the minimum tax, according to one person familiar with the discussions. It’s seeking a ‘carve out’ or exclusion for domestic profit, which the person said would undermine the effective tax rate of 15%. The agreement could ultimately provide a limited carve-out to satisfy China but not to the extent it would undermine the minimum tax rate, the person said.” (“China’s Likely Bid For Tax Exemption Poses Risk To Global Accord,” Bloomberg, 6/09/2021)
  • “Some of its high-tech businesses are taxed ‘well below’ 15%, and China ‘could propose carve-out measures for those sectors,’ said Wang Zecai, a researcher at the Chinese Academy of Fiscal Sciences, a think-tank affiliated with the Ministry of Finance, who said this was his own view rather than an official position. ‘Other nations may do the same as they may have similar domestic policies to encourage innovation.’” (“China’s Likely Bid For Tax Exemption Poses Risk To Global Accord,” Bloomberg, 6/09/2021)

“Yang Jiechi, President Xi Jinping’s top foreign-policy aide, in March told U.S. Secretary of State Antony Blinken that China wouldn’t follow ‘what is advocated by a small number of countries as the so-called rule-based international order.’ While the immediate context to Mr. Yang’s comments appeared to be Western criticism of Chinese human-rights policies, Beijing has repeatedly demanded a seat at the table for major governance decisions. A spokesman for China’s Foreign Ministry on Monday sidestepped a question on the merits of the tax proposal.” (“The G-7’s Global Tax Deal Faces a China Test,” The Wall Street Journal, 6/09/2021)


FLASHBACK: Democrat Leaders Said ‘One Of The Main Challenges Of The 21st Century Will Be Competing With And Confronting China’, ‘That Means Making Sure Every Nation Plays By The Same Rules In The Global Economy, Including China’

PRESIDENT BIDEN: “We’re in competition with China and other countries to win the 21st Century.  We’re at a great inflection point in history. … The investments I’ve proposed tonight also advance the foreign policy, in my view, that benefits the middle class. That means making sure every nation plays by the same rules in the global economy, including China.” (President Biden, Address to a Joint Session of Congress, 4/28/2021)

  • BIDEN: “And we’ll also take on directly the challenges posed by our prosperity, security, and democratic values by our most serious competitor, China. We’ll confront China’s economic abuses; counter its aggressive, coercive action; to push back on China’s attack on human rights, intellectual property, and global governance. … If we invest in ourselves and our people, if we fight to ensure that American businesses are positioned to compete and win on the global stage, if the rules of international trade aren’t stacked against us, if our workers and intellectual property are protected, then there’s no country on Earth — not China or any other country on Earth — that can match us.” (President Biden, Remarks, 2/04/2021)

SENATE MAJORITY LEADER CHUCK SCHUMER (D-NY): “Everyone knows our country and our economy faces daunting challenges beyond COVID-19. And while our two parties don’t agree on a whole lot, both Republicans and Democrats know that one of the main challenges of the 21st Century will be competing with and confronting China.” (Sen. Schumer, Remarks, 2/24/2021)

  • SCHUMER: “For nearly a century, America’s national security and economic security has been grounded in our scientific and technological superiority—often supported by smart investments by the federal government. But in recent years, countries like China have closed the gap with the United States. If we fail to respond, they will overtake us, with drastic consequences for our workers, businesses, and allies and partners around the world. … That’s because there is a bipartisan consensus that the United States must invest in the technologies of the future to out-compete China.” (Sen. Schumer, Remarks, 4/21/2021)


As Democrats Disadvantage American Companies On The World Stage, Their Tax Hikes Will Also Hammer Millions Of Small Businesses

THE WALL STREET JOURNAL EDITORIAL BOARD: “The House proposal will hit small businesses that pay taxes through the individual code especially hard. They’ll pay the higher individual rates, including a new 3.8% surtax on small business income, and they’ll pay on more of their income because the Democratic proposal eliminates the 20% deduction on qualified business income. That deduction was designed to equalize the tax burden for passthrough and Subchapter S companies with corporations. Now it will vanish for individual business owners who make more than $400,000. This will mean less hiring and fewer raises for the employees of these firms.” (Editorial, “Here Comes the Biden Tax Bill,” The Wall Street Journal, 9/13/2021)

Contrary To Their Rhetoric About Going After Big Companies, Democrats’ Corporate Tax Increase Would Hit 1.4 Million Small Businesses Employing Almost 13 Million American Workers With A Substantial Tax Hike

“Many assume that only big businesses will pay this higher rate. That couldn’t be farther from the truth. In fact, over a million small businesses—those ‘Mom-and-Pop’ retailers, small manufacturers, and professional services firms that often suffered the worst during the pandemic—would also see their tax bills increase significantly. In turn, this would have a negative impact on small businesses’ investment and growth plans and, most critically, hiring and job creation. There are 1.4 million small businesses (those with 500 employees or less) officially organized as C-Corporations, which means they would pay this higher rate. These small businesses employ almost 13 million American workers across various sectors.” (Curtis Dubay, “Small Business Would Be Hit Hard by Corporate Tax Increase,” U.S. Chamber of Commerce Website, 4/30/2021)

  • “Hardest hit would be the sort of skilled jobs that politicians love to praise, but often in practice, do too little to support. Manufacturing small business C-Corps employ the most workers out of the group (1.8 million workers). Professional, scientific, and technical services are next (employing 1.3 million), followed by retail (employing 1.2 million)…. Furthermore, small businesses organized as C-Corps are spread across all industries. Retail trade (179,000) has the most businesses. This is followed by professional, scientific, and technical services firms (175,000); real estate, rental and leasing (148,000); and construction companies (140,000).” (Curtis Dubay, “Small Business Would Be Hit Hard by Corporate Tax Increase,” U.S. Chamber of Commerce Website, 4/30/2021)

Democrats Are Also Planning To Gut The Small Business Deduction, Known As 199A, Which ‘Would Amount To A Direct Tax Hike On America’s Main Street Employers’

“Pass-through businesses, which don’t pay the corporate tax but instead pay taxes on their owners’ individual returns, would be affected in several ways. They would face caps on a special deduction created in 2017, with individuals limited to a $400,000 deduction and married couples limited to $500,000. Those businesses would also no longer be able to avoid paying a 3.8% tax on their active business income. Currently, taxes of that amount apply to wages, self-employment income and passive income but not other types of income.” (“Democrats Release Details of Proposed Tax Increase,” The Wall Street Journal, 9/13/2021)

NFIB PRESIDENT BRAD CLOSE: “The Small Business Deduction is one of the most important small business tax reforms in decades. The 2017 tax law provided pass-through businesses — S-corporations, partnerships, sole proprietorships and LLCs — significant relief, contributing to the economic boom of 2018-2019. Members of the National Federation of Independent Business (NFIB) routinely tell us that it allowed them to invest in new equipment and expand their workforces. More than 80 percent of members say the deduction is important to their business. More than 90 percent want it to be made permanent, so small business opposition to rolling back or repealing the deduction is overwhelming.” (Brad Close, Op-Ed, “Don't Gut The Small Business Deduction,” The Hill, 6/29/2021)

  • “When small business owners pass through business income to their personal tax returns, it doesn’t equate to their take-home pay. Instead, that money usually is the primary source of business investment, especially if they’re in a capital- or labor-intensive industry … Taxing this money will mean less investment on every front. In 2019, the Small Business Deduction created more than $66 billion in savings for small business owners who could be hit by [this tax increase.] That money’s best uses include wages for new hires, down payments on new trucks or assembly lines, and a thousand other worthy things. It belongs in the businesses, not with the tax collector.” (Brad Close, Op-Ed, “Don't Gut The Small Business Deduction,” The Hill, 6/29/2021)
  • “Any tax hike would arrive when small businesses can least afford it. Nearly a quarter of small businesses say taxes already are the single biggest problem they face, and coming off the economic devastation of the pandemic and shutdowns, Main Street is struggling. Labor shortages are rampant. Historically high levels of small businesses are raising prices to cover supply chain disruptions and other challenges. With a tax hike, many would consider raising prices higher still. That’s no recipe for recovery. It’s an invitation to greater pain — for small businesses, their workers, and their customers alike.” (Brad Close, Op-Ed, “Don't Gut The Small Business Deduction,” The Hill, 6/29/2021)

Over 100 Business and Trade Organizations: “The undersigned trade associations represent millions of individually- and family-owned businesses operating in every sector of the American economy. We write to voice our strong opposition to any reductions or repeal of the 20-percent deduction for qualified business income under Section 199A, including phasing out the deduction above certain income thresholds. Section 199A is an essential part of the Tax Code. Without it, individually- and family-owned Main Street businesses would pay significantly higher taxes, putting them at a competitive disadvantage and accelerating the economic consolidation taking place in our economy.” (American Bankers Association and over 100 trade associations, Letter to Sens. Wyden and Crapo and Reps. Neal and Brady, 6/22/2021)

  • “Section 199A provides critical tax relief to these businesses, enabling them to keep more of what they earn to reinvest in their employees and the communities they serve…. Proposals to limit or repeal the deduction would hurt Main Street businesses and result in fewer jobs, lower wages, and less economic growth in thousands of communities across the country. Such changes would amount to a direct tax hike on America’s Main Street employers … and we strongly oppose any attempt to cap or repeal it by Congress.” (American Bankers Association and over 100 trade associations, Letter to Sens. Wyden and Crapo and Reps. Neal and Brady, 6/22/2021)

Letter signed by:

  • The American Bankers Associations, AAHOA, Agricultural Retailers Association, AICC, The Independent Packaging Association, Air Conditioning Contractors of America, American Bakers Association, American Bankers Association, American Council of Engineering Companies, American Farm Bureau Federation, American Financial Services Association, American Foundry Society, American Hotel & Lodging Association, American Institute of Architects, American Land Title Association, American Mold Builders Association, American Rental Association, American Subcontractors Association, Associated Builders and Contractors, Associated Equipment Distributors, Associated General Contractors of America, Associated Wire Rope Fabricators, Auto Care Association, Brick Industry Association, The CCIM Institute, Coalition of Franchisee Associations, Construction Industry Round Table, Energy Marketers of America, Family Business Coalition, The Fertilizer Institute, FEUSA, FMI - the Food Industry Association, Foodservice Equipment Distributors Association, Franchise Business Services, Global Cold Chain Alliance, The Hardwood Federation, Heating, Air-conditioning, & Refrigeration Distributors International, ICSC, Independent Bakers Association, Independent Community Bankers of America, Independent Electrical Contractors, Independent Insurance Agents and Brokers of America, Industrial Fasteners Institute, Institute for Real Estate Management (IREM), Institute of Scrap Recycling Industries, Inc., International Association of Plastics Distribution, International Foodservice Distributors Association, International Franchise Association, International Institute of Building Enclosure Consultants, International Sign Association, International Warehouse Logistics Association, Main Street Employers Coalition, Manufactured Housing Institute, Material Handling Equipment Distributors Association, Metals Service Center Institute, Mortgage Bankers Association, NACSNAHAD - The Association for Hose and Accessories Distribution, NAMM - National Association of Music Merchants, National Apartment Association, National Association of Electrical Distributors, National Association of Home Builders, National Association of Insurance and Financial Advisors, National Association of Professional Employer Organizations, National Association of Professional Insurance Agents, National Association of REALTORS®, National Association of Wholesaler-Distributors, National Automatic Merchandising Association, National Automobile Dealers Association, National Community Pharmacists Association, National Electrical Contractors Association, National Fastener Distributors Association, National Federation of Independent Business (NFIB), National Franchisee Association, National Grocers Association, National Insulation Association, National Multifamily Housing Council, National Onion Association, National Ready Mixed Concrete Association, National Restaurant Association, National Retail Federation, National Roofing Contractors Association, National RV Dealers Assn (RVDA), National Small Business Association, National Stone, Sand & Gravel Association, National Tooling and Machining Association, NIADA, North American Die Casting Association, Pacific-West Fastener Association, Petroleum Equipment Institute (PEI), Precision Machined Products Association, Precision Metalforming Association, PRINTING United Alliance, The Real Estate Roundtable, REALTORS® Land Institute (RLI), Retail Bakers of America (RBA), S Corporation Association, SHDA - Security Hardware Distributors Association, Small Business & Entrepreneurship Council, Society of Collision Repair Specialists (SCRS), Society of Industrial and Office REALTORS®, Southeastern Lumber Manufacturers Association, Southwest Cable Communications Association, Specialty Equipment Market Association, Spray Polyurethane Foam Alliance, Subchapter S Bank Association, Tile Roofing Industry Alliance, Tire Industry Association, U.S. Chamber of Commerce, WF&FSA - The Wholesale Florist and Florist Supplier Association, Wine & Spirits Wholesalers of America, Wisconsin Grocers Association


As Democrats Are Preparing To Slam Millions Of Taxpayers And Small Businesses With Tax Hikes, They’re Still Planning A Tax Cut For Wealthy Residents Of High-Tax Blue States

HOUSE WAYS AND MEANS COMMITTEE CHAIRMAN REP. RICHARD NEAL (D-MA) And REPS. BILL PASCRELL (D-NJ) And TOM SUOZZI (D-NY): “With Speaker Pelosi, we continue to work among our colleagues and the Senate to undo the short-sighted capping of SALT … We are committed to enacting a law that will include meaningful SALT relief … and we are working daily toward that goal.” (Reps. Neal, Pascrell, and Suozzi, Press Release, 9/13/2021)

“A group of blue-state Democrats is pushing for its top tax priority as part of President Joe Biden’s next major legislative package — a possible voting bloc that could make or break the bill if they stay united on the House floor. The House Democrats stepping forward want to see a Biden infrastructure package that repeals the Trump-era limit on state and local tax deductions, known as the SALT deduction. The repeal is popular among blue-state members of their party but carries a significant budgetary cost, making it one of the emerging fault lines in Democrats’ coming infrastructure talks.” (“Blue-State Democrats Demand SALT Relief In Biden’s Next Big Bill,” Politico, 3/30/2021)

  • “Four House Democrats — Suozzi and Reps. Mikie Sherrill, Josh Gottheimer and Bill Pascrell of New Jersey — have gone public so far with their insistence on SALT reinstatement in the upcoming package. Privately, though, several more lawmakers are in conversations about the effort and plan to formally join in the coming days, according to multiple members and aides. And right now, Speaker Nancy Pelosi and her leadership team can only afford to lose three Democratic votes…” (“Blue-State Democrats Demand SALT Relief In Biden’s Next Big Bill,” Politico, 3/30/2021)
  • “One of the biggest potential sticking points for a partisan infrastructure and social-spending push is actually a tax cut: Several Democratic lawmakers want to ease the $10,000 deduction cap for state and local tax payments. Removing or raising the cap has support from Democrats in high-tax coastal areas like California, New York, and New Jersey, including Rep. Katie Porter (Calif.), a high-profile ally of Sen. Elizabeth Warren (Mass.) and a fledgling progressive icon.” (“Biden’s Tax Plan to Fund Spending Boom Stirs Democrats’ Unease,” Bloomberg Tax, 6/04/2021)

REP. JAMIE RASKIN (D-MD): “We’ve got to have a SALT march, like Gandhi did… Let’s have a SALT march in America to restore some common sense to our tax policy.” (“Democrats Consider ‘SALT’ Relief For State And Local Tax Deductions,” NBC News, 6/24/2021)

REP. TOM SUOZZI (D-NY): “I’m not voting for any changes in the tax code unless we reinstate SALT as part of the deal.” (“Scoop: Moderate Democrats Buck Biden Tax Hikes,” Axios, 3/29/2021)

REP. JOSH GOTTHEIMER (D-NJ): “No SALT, no dice… There’s plenty of ways, in my opinion, to raise revenue and reinstate SALT.” (“Democrats Look to Smooth the Way for Biden’s Infrastructure Plan,” The New York Times, 3/29/2021)

Even The New York Times Editorial Board Calls This Demand ‘A Major Change In Tax Policy That Would Allow The Wealthiest Americans To Pay Lower Taxes’

THE NEW YORK TIMES EDITORIAL BOARD: “Why Are Democrats Pushing a Tax Cut for the Wealthy? … Democrats [campaigned] in the 2020 elections … on the need for the wealthiest Americans to pay higher taxes. Now the party is flirting with a major change in tax policy that would allow the wealthiest Americans to pay lower taxes. A bloc of House Democrats, mostly from the New York area, are loudly withholding support for a broad package of tax increases to fund President Biden’s infrastructure plan unless it also includes a tax cut: an unlimited deduction for state and local tax payments, or SALT…. In an open letter [in April] addressed to the House speaker, Nancy Pelosi, 17 of the 19 Democrats who represent New York threatened to do exactly that, writing that they ‘reserve the right’ to vote against any tax increase that does not include a ‘full repeal’ of the $10,000 limit on the SALT deduction, enacted in 2017. A number of Democrats from other states, including New Jersey and California, have taken a similar stand…. Proponents of an unlimited SALT deduction say they are seeking to help middle-class taxpayers. If so, they should go back to the drawing board. The top 20 percent of American households, ranked by income, would receive 96 percent of the benefits of the change, according to a detailed analysis by the widely respected Urban-Brookings Tax Policy Center. The primary beneficiaries would be an even smaller group of the very wealthiest Americans. The 1 percent of households with the highest incomes would receive 54 percent of the benefit, on average paying about $36,000 less per year in federal income taxes.” (Editorial, “Why Are Democrats Pushing a Tax Cut for the Wealthy?,” The New York Times, 4/25/2021)

And Socialist Sen. Bernie Sanders Also Says Repealing The SALT Cap ‘Sends A Terrible, Terrible Message… You Can’t Be On The Side Of The Wealthy And Powerful If You’re Going To Really Fight For Working Families’

SEN. BERNIE SANDERS (I-VT), Senate Budget Committee Chairman: “It sends a terrible, terrible message when you have Republicans telling us that [SALT deduction] is a tax break for the rich… In fairness to Schumer and Pelosi, it is hard when you have tiny margins, but you have got to make it clear which side you are on — and you can’t be on the side of the wealthy and powerful if you’re going to really fight for working families.” (“Bernie Sanders Opposes Push To Reinstate SALT Deduction,” Axios, 5/09/2021)

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): “[SALT cap relief is] a gift to billionaires. We can have a conversation on the policy, but it’s a bit of an extreme position, to be frank.” (“‘Mr. SALT’ and N.J. Ally Fight Ocasio-Cortez to Revive Tax Break,” Bloomberg, 8/10/2021)


REMINDER: Economists Say Repealing The SALT Cap Is ‘Regressive Tax Policy’ That ‘Would Not Benefit The People Who Need Help’

“Economists and tax experts from across the political spectrum are panning House Speaker Nancy Pelosi’s idea to stimulate the economy in the next bailout bill by raising the federal cap on tax deductions for state and local taxes. The move wouldn’t give the economy much of a boost, they say.” (“Economists Pan Pelosi’s Proposal To Lift Cap On State And Local Tax Deductions In Next Bailout,” Politico, 3/31/2020)

KARL SMITH, Vice President of Federal Tax and Economic Policy at the Tax Foundation: “A retroactive repeal is the worst of both worlds… It increases the probability that bad tax policy will be made permanent without the certainty to even allow the potential side-benefits to real estate markets and state and local government to materialize.” (“Economists Pan Pelosi’s Proposal To Lift Cap On State And Local Tax Deductions In Next Bailout,” Politico, 3/31/2020)

“Many liberal economic policy analysts also oppose lifting the SALT cap, calling it regressive tax policy.” (“Pelosi Floats New Stimulus Plan: Rolling Back SALT Cap,” The New York Times, 3/30/2020)

Joint Committee On Taxation: 94% Of The Benefits Of Repealing The Cap On State And Local Tax Deductions Would Go To Taxpayers Making Over $200,000

JOINT COMMITTEE ON TAXATION: “[A] proposal to repeal the $10,000 limitation on the deduction for State and local taxes beginning in 2019 … is estimated to result in a decrease in tax liability for 13.1 million taxpayers, 94 percent of which have $100,000 or more of economic income. Additionally, approximately 99 percent of the decrease in tax liability accrues to taxpayers with $100,000 or more of economic income.” (“Background On The Itemized Deduction For State And Local Taxes,” Joint Committee on Taxation, JCX-35-19, 6/24/2019, p. 14)

According to Joint Committee on Taxation estimates, repealing the SALT cap would result in large tax cuts for millionaires and almost no benefit for middle class taxpayers making between $50,000 and $100,000 per year. (“Background On The Itemized Deduction For State And Local Taxes,” Joint Committee on Taxation, JCX-35-19, 6/24/2019, p. 14“Overview Of The Federal Tax System As In Effect For 2019,” Joint Committee on Taxation, JCX-9-19, 3/20/2019, p. 34)

Tax Policy Center: ‘About 96 Percent Of The Benefits’ Of Repealing The Cap On State And Local Tax Deductions ‘Would Go To The Top 20 Percent Of Taxpayers’

TAX POLICY CENTER: “Congressional Democrats have introduced several proposals to repeal the new cap on state and local deductions. About 96 percent of the benefits for doing so would go to the top 20 percent of taxpayers, according to the Tax Policy Center. Other analyses have found similar distributional impacts of the cap.” (“Democrats Said A GOP Tax Law Provision Would Devastate Blue States. That’s Not Happening.,” The Washington Post, 5/01/2019)



Related Issues: Taxes