Senate Budget Committee Chairman Bernie Sanders, who could play an oversized role in passing President Joe Biden’s next spending package, is opposed to restoring full federal state and local tax deductions.
“You have to be clear about which side you are on and you cannot be on the side of the rich and powerful if you really want to fight for working families,” Sanders, I-Vt Axios said Monday.
Several studies show that most of the benefits of repealing the $ 10,000 cap on state and local taxes by Republican Tax Law would go to wealthier taxpayers. However, in high-tax states like New Jersey, where many midsize homeowners would benefit, this has different implications.
New Jersey Democratic lawmakers were quick to criticize Sander’s stance.
“Fortunately, Bernie Sanders cannot dictate what we do here,” said Rep. Tom Malinowski, D-7th Dist., A member of a caucus of nearly three dozen members from both parties who are campaigning for the restoration of the tax break known as SALT.
“As everyone in New Jersey knows, most of the people who benefited from the SALT withdrawal were middle class. It is basically anyone who owns a house in my district regardless of their income. “
Congressional Republicans have accused Democrats who support the restoration of full state and local tax withholding of trying to cut taxes on the rich.
The GOP passed a tax cut that, according to the Tax Policy Center, granted 65% of the benefits to the richest 20% of U.S. households, and used the original $ 2 trillion CARES bill to pass a tax break that Granted 82% of Benefits to Taxpayers According to the Joint Tax Committee, more than $ 1 million are earned annually.
“It sends terrible, terrible news when Republicans tell us this is a tax break for the rich,” Sanders said.
The Sanders Committee would draw up the legislation as part of a reconciliation and allow the Democrats to pre-exempt a Republican Senate filibuster and President Joe Biden’s trillion dollar proposal to finance infrastructure, education and childcare through tax increases for the corporate and rich to adopt.
With Senate Democrats having only one vote advantage due to Vice President Kamala Harris’ ability to break ties, they cannot afford to lose all support. assuming every Senate Republican opposes the expense bill.
Other Democrats, including New York City Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi, of California, have called for the restoration of state and local tax breaks hardest for the states hardest hit by the coronavirus pandemic and Washington is sending billions of dollars more to them than they are receiving in services.
A study by the Progressive Institute for Taxes and Economic Policy found that 30% of New Jersey residents would see a tax cut if the $ 10,000 cap were suspended, more than any other state.
About 80% of the 1.9 million New Jersey residents who would benefit from the cap lifting had an average income of $ 216,000 or less, as 72% of the benefits would go to the richest 5%.
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Jonathan D. Salant can be reached at email@example.com. Follow him at @JDSalant.
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