Democrats Wave White Flag On Their SALT Plan – They Will Likely Abandon Blue State Tax Cuts For Rich
Joe Biden’s legislative agenda has stalled in Congress. As the man suffers tremendous failure, lawmakers abandon his plans. That includes his spending bill, which was pronounced dead at the end of last year. But a few lost souls still thought they could get some of it through, to salvage their political lives come November.
One of the things Democrats wanted to pass was a change to the SALT cap. This cap prevents rich Democrats from getting out of paying their federal taxes. Democrats, who often promise to force the rich to pay their “fair share” were all too eager to eliminate this cap. Even Schumer promised to do it.
But now, the word is it’s not going to happen. From The Hill:
Senate Democrats say a proposal to raise the cap on state and local tax (SALT) deductions, a top priority of Senate Majority Leader Charles Schumer (D-N.Y.), is likely to be cut from the revised Build Back Better Act.
Senate Democrats who were involved in negotiations over the bill before Sen. Joe Manchin (D-W.Va.) blew it up last month say there’s simply not enough room for the expensive tax change, which Republicans argue would benefit wealthy suburban households in blue states.
Biden’s radical spending bill died last month after Joe Manchin refused to support it. Rumors floated around that talks could resume to come up with a revised version of the bill. Those talks haven’t seemed to have happened yet, as Manchin doesn’t seem interested.
But what has been declared dead is Schumer’s attempt to enrich wealthy Democrats in blue states. The SALT cap was put into place by Donald Trump. It capped deductions for state tax at around $10,000. That meant, if you paid more state taxes, you couldn’t claim them on your federal tax.
Democrats wanted to get rid of this cap, so rich Democrats in blue states could deduct much more from their federal taxes. How would Democrats afford to pay for Biden’s massive spending plans, then? Good question. By passing on that burden to the rest of us.
That was a major sticking point for Manchin—and even tax-loving socialists like Bernie Sanders. But where Sanders wanted to tax Americans more, Manchin wanted to cut spending and reduce the tax burden for most Americans.
Either way, this scheme has failed. Not that Biden’s spending bill has much of a chance at passing now.
Source: The Hill