be asked of Republicans so eager to keep the SALT cap in place. Their answer seems to be no tax breaks for the rich and no subsidies for Democratic-led states. Except that states don’t pay taxes... People pay taxes . In the U.S., the richest Americans once again account for a gargantuan portion of the annual federal tax take. All the revival of SALT would mean is that the heavily overtaxed rich would get a partial break from their annual fleecing. For the Right-leaning to pretend SALT’s revival would amount to “a big fat tax break for the rich” is for them to speak with a forked tongue. If the rich already pay the majority of federal taxes (and they do), revival of the SALT deduction would amount to tax relief for a tiny part of the population that creates or invests in the most economic progress and that is heavily overtaxed for doing so. If the rich already pay the majority of federal taxes (and they do), revival of the SALT deduction would amount to tax relief for a tiny part of the population that creates or invests in the most economic progress and that is heavily overtaxed for doing so. Now, some who disagree will respond that Americans in low-tax, allegedly parsimonious states shouldn’t have to suffer reduced deductions against federal taxes paid in
savings, no economic school can get around the basic truth that companies, jobs, and progress are preceded by capital commitments that the rich are uniquely situated to make. Despite this, it’s accepted wisdom on the Right that revival of the SALT deduction is wrongheaded. Again, it’s a tax cut for the rich, plus it’s a subsidy for high-tax blue states. If SALT is revived, blue, Democratically run states like California, Illinois, and New York will get a tax break on the back of red, Republican-run states not so wasteful on the local level. At first glance, the arguments are compelling. But only at first glance... Given a second pass, these confidently pronounced arguments against re-introducing the deduction start to lose their luster. WHERE THE RIGHT ISWRONG For one, members of the Right can’t have it both ways. Yet with SALT, that’s what they seem to want. Lest we forget, members of the Right have for the longest time properly ridiculed calls by Obama, Biden, Elizabeth Warren, Nancy Pelosi, Krugman, et al., for higher taxes on the rich. According to the leading minds of the Left and the Democratic Party, the rich need to pay their “fair share.” In response, the Right-leaning have routinely (and once again, properly) pointed out that the top 1% of taxpayers already account for 40% of total federal tax revenues. So what could the Dems possibly mean by “fair share”? The question is crucial, but also demands to
American Consequences
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