Senate Democrats All Vote For A Tax Cut For Millionaires And Billionaires

Given The Opportunity To Ensure Their Tax Break For Wealthy Residents Of High-Tax Blue States Doesn’t Benefit Millionaires And Billionaires, Every Single Senate Democrat Voted For The Tax Cut For The Wealthy

All 50 Senate Democrats voted against Sen. Chuck Grassley’s (R-IA) amendment to prevent changes to the federal state and local tax deduction cap benefitting people making over $1,000,000. (S.Amdt.3251, S.Con.Res.14, Roll Call Vote #326: Amendment Rejected 48-51: D 0-48; R 48-1; I 0-2, 8/10/2021)

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “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…. 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…. 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.” (Sen. McConnell, Remarks, 10/23/2019)

SEN. CHUCK GRASSLEY (R-IA): “My Democratic colleagues claim the wealthy are not paying their fair share, while at the same time would like to give millionaires six figure tax cuts. If Democrats are really concerned about the wealthiest Americans paying higher taxes, than they should have no problem supporting my amendment. This commonsense amendment will add language to ensure any so-called SALT cap relief doesn’t line the pockets of millionaires.” (Sen. Grassley, Press Release, 8/10/2021)

‘We’ve Got To Have A SALT March, Like Gandhi Did’: Blue State Democrats Demand A Full Repeal Of The SALT Cap, A Tax Cut For Wealthy Taxpayers In High-Tax States

“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)

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)


But Even Socialist Sen. Bernie Sanders 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)


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)


FLASHBACK: Democrats Spent Months Holding Up COVID Relief As They Insisted Any Bill Include Their Tax Cut For Wealthy Residents Of High-Tax States

“House Speaker Nancy Pelosi, D-San Francisco, has made a priority of rolling back the SALT deduction cap, which was included in the Republican-passed tax bill that former President Donald Trump signed in late 2017. That legislation capped federal deductions for state and local taxes to $10,000, or $5,000 each for married couples filing separately. Pelosi has cited repealing the cap as a possible way to provide relief to Americans during the coronavirus pandemic, and Senate Majority Leader Chuck Schumer, D-N.Y., has also sought to restore SALT deductions.” (San Francisco Chronicle, 2/02/2021)

“As lawmakers prepare for another round of fiscal stimulus to address economic fallout from the coronavirus pandemic, Speaker Nancy Pelosi suggested the next package include a retroactive rollback of a tax change that hurt high earners in states like New York and California.” (“Pelosi Floats New Stimulus Plan: Rolling Back SALT Cap,” The New York Times, 3/30/2020)

  • “In an interview with The New York Times, Ms. Pelosi said the next phase of an economic rescue package should include additional measures to get more money directly to individuals — like the $1,200 direct payments for low- and middle-income taxpayers that were authorized in the $2 trillion bill that President Trump signed on Friday. That could be achieved, she said, by having Congress ‘retroactively undo SALT,’ a reference to a cap on the state and local tax deduction that Republicans included in their 2017 tax overhaul. That limit prevents households from deducting more than $10,000 a year in state and local tax expenses from their federal tax bills.” (“Pelosi Floats New Stimulus Plan: Rolling Back SALT Cap,” The New York Times, 3/30/2020)

Q: “I understand you’re pushing for a repeal of the SALT caps in this--in this package. Can you tell me why that’s pertinent and…”
SEN. CHUCK SCHUMER (D-NY): “Well, it’s not just on pushing it. There is a two-year repeal in the HEROES Bill and I believe it should stay in.” (Sen. Schumer, Press Conference, 8/04/2020)

Both Versions Of Democrats’ So-Called ‘HEROES Act’ Included The Repeal Of The SALT Cap

May 2020: PAGE 228: “SEC. 20161. ELIMINATION FOR 2020 AND 2021 OF LIMITATION ON DEDUCTION OF STATE AND LOCAL TAXES.” (H.R. 6800, 116th Congress)

  • “House Democrats released the text Tuesday for its latest proposed Covid-19 relief measures. … Tucked away in the bill is a measure that will reinstate the so-called SALT itemized deduction for 2020 and 2021. The Tax Cuts and Jobs Act, which went into effect in 2018, limited the amount of state and local tax deductions filers could claim on their tax returns to $10,000. … The new proposal doesn’t specify what’s supposed to happen after 2021.” (“House Democrats’ Stimulus Bill Rolls Back $10,000 SALT Cap For 2 Years,” CNBC, 5/12/2020)

October 2020: PAGE 789: “SEC. 151. ELIMINATION FOR 2020 LIMITATION ON DEDUCTION OF STATE AND LOCAL TAXES.” (House Rules Committee Print 116-66, House Amendment to the Senate Amendment to H.R. 925, 9/29/2020)



Related Issues: Taxes, Senate Democrats