“This is a giant political payoff to House Democrats from New York, New Jersey, Illinois and California so they vote for the Sanders-Pelosi $4 trillion tax and spending bill. As a raw exercise in political and economic hypocrisy, this is one for the ages.”
–Wall Street Journal Editorial
Tax analysts on the left, center and right agree on this one. The Progressive Policy Institute calls it a “pointless giveaway to the rich.” Brookings, which says the SALT tax cap should be eliminated, not expanded, because it is a handout to the rich. But the “Build Back Better” bill now pending in Congress includes that gift to the wealthy among its many abominations. It’s an increase in how much state and local tax (SALT) can be deducted by the wealthy. CNBC summarized the specifics this way:
The wealthy would get a reprieve on state and local taxes next year. Households could deduct up to $80,000 of state and local taxes from the federal tax bill — a significant increase from the current $10,000 cap.
On average, that change would dilute higher taxes on the wealthy from the other measures. About three-fourths of the SALT relief would go to the richest 5% of taxpayers in 2022, according to the Institute on Taxation and Economic Policy.
It’s the second most expensive item in the monstrous Build Back Better bill, which even the New York Times has described as “cradle to grave” government. The bill already passed the House along party lines, with all Illinois Democrats in support: Bobby Rush, Robin Kelly, Marie Newman, Jesus Garcia, Mike Quigley, Sean Casten, Danny Davis, Raja Krishnamoorthi, Jan Schakowsky, Brad Schneider, Bill Foster, Lauren Underwood and Cheri Bustos.
It is now up to the Senate, but both Illinois senators, Dick Durbin and Tammy Duckworth, are in favor of both the bill and the SALT gift to the rich. In fact, they have long led the charge in favor of an even more generous gift: the complete elimination of the SALT deduction cap.
Gov. J.B. Pritzker, too, already went on record in support of that more generous gift to the rich.
They have no shame.
-Mark Glennon
A set of state lawmakers want to extend CPS’ current school closing moratorium to February 1, 2027 – the same year CPS is set to transition to a fully-elected school board. That means schools like Manley High School, with capacity for more than 1,000 students but enrollment of just 78, can’t be closed for anther three years. The school spends $45,000 per student, but just 2.4% of students read at grade level.
Hopefully, all media will get the message, in Illinois, too.
Ted joined Tom Miller of WJPF to talk about Illinois’ highest-in-the-nation property taxes, why lawmakers don’t want to touch the tax’s cost drivers, just how much Illinoisans’ tax burden has grown over the decades, why Gov. Pritzker failed to meet his promise to reform property taxes, and more.
Well said, congratulations.
I thought your audience might be interested in reading A slightly different take on the same subject: “A trillion dollars here, another trillion there.”
I thought the SALT cap was partly offset by changes in AMT?
In response to criticism from both the left and the right that the SALT cap repeal would benefit the wealthy the most, some Senate Democrats are saying they want to pair the repeal with expansion of the AMT, in order to claw back some of that windfall. It’s unclear exactly what they will propose or whether they will succeed. https://www.washingtonpost.com/us-policy/2021/11/03/salt-democrats-biden-amt/
The next shoe to drop will be tuition forgiveness. So a kid who wants to open a plumbing business out of high school, no college, gets nothing. But the kid that racks up 200k in bills for a useless degree gets 200k. We’d be better off buying the first kid a truck, tools, a parts inventory and some legal and tax setup for his business. Free tuition is also a giveaway to the rich to get their kids properly brainwashed in anti capitalism. If government pays for college then you better believe govt will decide what to teach. It’s coming.
Surprise, surprise: its here and been so for many, many decades. Its found in every state’s high school “graduation requirements” which not so surprisingly mirrors college entance requirements. The days when students truly ruled as to what courses would truly interest them enough to enroll are long gone. That has a positive role in some cases but a negative one in others as well. Its big government decision-making acting once again in everyone’s life.
This should be no surprise to anyone. The Founders understood that people in government operate out of self interest, particularly their interest in their incumbency. This shows that our struggle is not right against left, but professional politicians against the rest of us. The checks and balances of our Constitution are mostly negated when there is little turnover in those in Congress, and bills are written as large conglomerations of provisions that are difficult to digest and released shortly before the votes. We must take our country back!
Actually, while a few rogue Republicans vote for the garbage, the Democrats lead the charge on all the nonsense
Is that why the majority of the Republicans in the state senate voted to enshrine constitutional protected rights for collective bargaining for the 2022 ballot? Are you stating that the majority of Republicans in the senate vote for garbage? Or is the amendment not garbage after all?
I’m not wealthy by any means & this would benefit us tremendously! This is not for the rich!
Only about 1.6 percent of middle-income households (those making between about $54,000 and $96,000) would receive any benefit from the increased cap. By contrast, more than half of those in the 90th to 95th percentile (those making between about $254,000 and $366,000) would get a tax cut. Three-quarters of those making between $366,000 and $867,000 (the 95th to 99th percentile) would see their taxes reduced. https://www.forbes.com/sites/howardgleckman/2021/11/04/the-latest-salt-cap-fix-would-mostly-benefit-high-income-households-do-little-for-middle-income-people/?sh=2d92e5ef49df
By limiting the SALT deduction, taxpayers in IL, NJ, CA and NY aren’t subsidized by the rest of the country (taxation without representation?) and those states’ governments are exposed for what they really are – wasteful, bloated and greedy. Illinois politicos ran around with their hair on fire when the law passed, but did nothing to rectify the problem. Instead, Putzker spent $55M of his own money(?) in an effort to raise our taxes. Like you, I would benefit by unleashing the limit, but it’s another form of Federal bailout (eliminating the pressure on state government to lower its state… Read more »
$80k is the cap probably because it covers all but the 1%. More realistically in our area, the typical upper middle class family earning $250,000 a year with a $15,000 real tax bill and a $12,500 state tax bill will save about $5,000 if the SALT tax cap were repealed. (using my quick calculations). But in places like Cali, where it takes $500,000 to live upper middle class (CA is very expensive including housing, transportation, local taxes) they have a state tax rate of about 10%, and their real estate taxes are outrageous too https://www.redfin.com/CA/Santa-Clara/2344-Benton-St-95050/home/1814294 A house very similar from… Read more »
A lot of ordinary Illinois homeowners not in the top 5% of income pay more than $10,000 in real estate tax alone. Apparently you wish them to pay more taxes.
Those taxpayers voted for those high Illinois taxes so it was their choice to do so. Nice try to spin this one but no cigar for you today.
It’s not “a lot.” Study after study has shown that the SALT cap fell almost entirely on the wealthy. The cap on SALT deductions was a windfall for the middle class. We wrote about it earlier here: https://wirepoints.org/pritzker-lobbies-for-huge-federal-tax-cut-for-the-rich-with-dishonest-letter-to-biden-wirepoints/
The SALT cap tax was a big middle finger from red state Republicans to blue state Democrats. It was music to my ears to hear all the blue state whining. But now that the tables are turned and the Democrat’s ire is focused back on Republican 10-fold, it’s demoralizing and painful to watch. Because that’s what the BBB bills are, massive spending bonanzas for blue states using red states’ money.
No, Illinois wishes you pay more taxes. If we lived in a low tax state, the SALT limit would have a much lower impact on you. I’m Illinoyed, you should be too.
And you should move out of Illinois.
Otherwise you won’t be taken seriously.
Here’s an article that is hidden in the bill on page 1647 that you do not need a S.S. number anymore to receive a child tax credit. Can anyone look into this if it is true.
https://www.sarahpalin.com/2021/645259/provision-found-hidden-on-page-1647-of-bidens-spending-bill-could-give-illegals-billions-of-dollars/
https://www.foxnews.com/politics/biden-spending-bill-child-tax-credit-requirement