Let's say a group of people want to build a park.
They get together, form a 501.3.c, decide how much money everyone's gonna contribute, everyone writes it off as a charitable contribution, and build the park.<p>Let's say a group of people with a government wants to build a park.
The get together, vote to decide how much money everyone's going to contribute, everyone ____, and they build the park.<p>____ is the SALT deduction.<p>The only reason not to have this deduction is to discourage (non-federal) governments ability to do anything.<p>Arguments of 'it's free money for the rich' are a misdirection - if you want the rich to pay more money, increase their taxes, don't limit state and local governments ability to collect revenue.<p>The only hypocrisy is the folks arguing against it will turn around and holler 'States Rights!' when it's politically convenient for them.
Removing the SALT deduction cap affects people wealthy enough to still itemize <i>after</i> the standard deduction was <i>doubled</i> in the TCJA. Let that sink in.<p>The number of people itemizing before the TCJA was about 46m, the number after the standard deduction was doubled is only about 16m. There are about 143m people filing returns in the US (taxpaying units).<p>So about 10% of US taxpaying units still itemize meaning they're deducting more than $12k individually or 24k jointly.<p>This issue disproportionately affects the wealthy. The top 10% of income earners are getting bitten by this, and the top 1% especially so.<p>As the TK article illuminates, the US would lose $600 billion in revenue by repealing the SALT cap. That money comes disproportionately from the top 1% as illustrated by the graph from the Brookings Institute:
<a href="https://cdn.substack.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F21b96481-5042-4ec2-998a-50ced6ec556f_1016x809.png" rel="nofollow">https://cdn.substack.com/image/fetch/f_auto,q_auto:good,fl_p...</a><p>The article quotes a guy saying the SALT cap was the only clearly progressive tax policy the Trump administration ever implemented.<p>So yes, it's funny though not altogether surprising to see the Democrat senators and senior House members (all of whom seem to be in the affected income bracket themselves) pitching this deduction for the wealthy as a fight for 'working families'. It is impossible to even entertain the idea unless open to the idea that supply-side, trickle-down economic theory has merit, which is also a humorous dimension of the Democrat rhetoric.