A stack of $100 bills.
President-elect Joe Biden unveiled his $1.9 trillion stimulus package, which includes a $1,400 check to working and middle-class Americans instead of the $2,000 check President Trump has demanded. Meanwhile, Democrats are considering renewed legislation that would provide billions of dollars in tax breaks for their wealthy blue-state donors.
Democrats on the House Committee on Ways and Means (H&M) will again consider a plan that would end the $10,000 cap on state and local tax (SALT) deductions imposed by the Trump administration in 2017. If the tax deduction cap is eliminated, millionaires and billionaires would be in for a huge windfall.
Democrats have been trying to remove the SALT deduction cap since the 2017 tax law capped it at $10,000. The Daily Poster compared the cost of lifting the tax cap to the cost of stimulus checks.
Originally promised $2,000, Biden reduced it to $1,400, according to estimates by the Congressional Joint Committee on Taxation and the Committee for a Responsible Federal Budget (CRFB), a nonpartisan public policy research organization. According to estimates by the Joint Committee on Taxation and the Committee for a Responsible Federal Budget (CRFB), a cross-party public policy research organization, this would save the federal government between $164 billion and $200 billion. And if Democrats choose to permanently repeal the SALT relief cap, it would cost nearly $600 billion, twice as much as the stimulus check.
The $2,000 check would be targeted to help the bottom 60 percent of earners, increasing their annual income by an average of 11 percent. For the poorest Americans, this would be a particularly large income boost. In contrast, repealing the SALT cap would primarily benefit wealthy households, with the richest 5 percent receiving more than 80 percent of the gains.
Howard Gleckman, a senior fellow at the Tax Policy Center, a nonpartisan Washington think tank, said the top 1 percent of households would receive about 60 percent of the benefits of SALT cap repeal, which translates into an average tax cut of more than $33,000. more than $10,000.
In March 2020, the CRFB wrote in an analysis that ending the cap would ensure that households earning more than $1 million would receive more than $100,000 on average, while those earning less than $50,000 would receive little to no benefit from lifting or raising the SALT cap.
“This is not a tax cut for those hardest hit by the virus.” Richard V. Reeves and Christopher Pulliam, experts at the Brookings Institution, a leading U.S. think tank, write, “Democrats’ pursuit of such deeply regressive tax cuts casts serious doubt on their egalitarian claims. It is a shame to see Democrats eager to provide the richest, whitest-skinned families with a huge tax cut, which is arguably the last thing the country needs right now.”
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