Politics Lawmakers can't reconcile weakening the SALT cap with progressive goals
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Sometimes, the final piece of the Stanley Cup-contending puzzle is bringing in that veteran UFA center who knows how to play playoff hockey. These five 2021 free agents could be that piece for Cup-hopefuls this off-season. © Provided by Hockey News on Sports Illustrated The 2021 UFA window opens in just over a week. NHL GMs are running out of time to make their preparations ahead of the off-season's most frenzied period. Fortunately, though, there are at least a few viable options whose values have been known around the league for quite some time.
While President Biden has called for higher taxes on wealthy Americans and corporations to finance a, some Democrats in Congress are undermining this agenda by demanding that the agreement cut taxes on their affluent constituents. These lawmakers argue that the $10,000 cap on the state and local tax (SALT) deduction created by the GOP's 2017 tax law undermines their states' ability to raise revenue through progressive tax policy.
But in reality, any effort to weaken or repeal the cap would simply be a pointless giveaway to the rich. Democrats should reject this regressive tax cut that would draw critical resources away from needed public investments.
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"No SALT, no deal,"Reps. Josh Gottheimer (D-N.J.), Bill Pascrell (D-N.J.) and Tom Suozzi (D-N.Y.), who are just some of the demanding that Congress repeal or weaken the SALT cap in their reconciliation bill, the legislative vehicle that will let Democrats pass their budget agreement without any Republican votes. These lawmakers claim that the cap deliberately makes it harder for their heavily Democratic state governments to tax the wealthy at high rates without pushing those taxpayers out to lower tax jurisdictions.
Before 2018, taxpayers who itemized deductions on their federal income taxes could deduct every dollar they paid in property taxes, plus either income or sales taxes at the state and local level, from their taxable income. The Republican tax law capped that amount at $10,000 per household through 2025. Opponents of the cap want to repeal it entirely but have also proposed raising it or repealing it only for households with incomes below a threshold.
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Figuring out what Hart, Couturier, and Giroux will make on future contracts is key, among other things.(Frankly, it’s difficult to imagine their goaltending being the flat-out worst in the NHL again. They were the worst by a shockingly comfortable margin in 2020-21.
It appears they are winning. Senate Budget Committee Chairman Bernie Sanders (I-Vt.) previouslythat repealing the SALT cap "sends a terrible, terrible message when you have Republicans telling us that this is a tax break for the rich." But he $120 billion in a recent draft reconciliation blueprint for unspecified changes to the SALT deduction, an amount greater than what the earmarks for roads and bridges.
Fortunately, other Democrats across the ideological spectrum havebecause doing so would give away much needed tax revenues to the wealthy. This group includes both moderates such as ) and ) and Abigail Spanberger (D-Va.), as well as some in the party's leftwing, including Reps. Alexandria Ocasio-Cortez (D-N.Y.), Joaquin Castro (D-Texas) and Mark Pocan (D-Wis.).
Wild, Eichel never seemed like good fit
The Minnesota Wild have reportedly backed away from the Jack Eichel trade situation because of the asking price but it never seemed like something that could work.One of the teams rumored to be in the market for Buffalo’s disgruntled superstar has been the Minnesota Wild. A playoff team a year ago that has a glaring need for a No. 1 center and another superstar, franchise player. But according to the Athletic’s Michael Russo the Wild have, at least for now, backed out of the Eichel sweepstakes because according to his sources they are “fed up with the asking price from the Buffalo Sabres for the $10 million star with a neck injury.
These skeptical Democrats are right. Even if lawmakers repealed the SALT cap exclusively for households earning below $500,000,would go to the lowest earning 60 percent of Americans. Only households that earn enough money to pay over $10,000 in state and local taxes would benefit from weakening the cap. Wealthy households also are the most likely to itemize their deductions, which . And like all deductions, SALT works by reducing taxable income, which lowers the tax burden of someone in a high tax bracket more than someone in a low bracket.
Contrary to what the cap's opponents say, it does not keep state and local governments from raising revenue. Those governments already received $525 billion from the American Rescue Plan, whichtheir current budget shortfalls. But even if they did need more revenue, the SALT cap is not preventing them from raising taxes on the wealthy.
High-tax states, including New York, New Jersey, Connecticut and Washington, havetaxes on their richest residents since the cap was implemented. This suggests that effective federal tax rates are not too high for states to raise revenue. And there's no sign that the cap is driving wealthier taxpayers away: In 2018, 32 percent of the took place in the , compared to 27 percent in 2017.
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Whether they can sign extensions or need deals now, expect big money for Dahlin, Fox, Hughes, and others.That goes for mid-grade and depth defensemen, who’ve signed one eye-popping free-agent contract after another.
Rather than diverting funds from other progressive priorities to finance this tax giveaway to the rich, federal lawmakers should do three things. First, they should address a legitimate criticism of the SALT cap by mitigating the marriage penalty it creates. Under present rules, married couples face the same cap as single taxpayers, which means they can claim only half as large of a deduction per person. Raising the cap for married couples and making the change deficit neutral by lowering the singles cap would give people in high-tax states some tax relief without sacrificing federal revenue. Next, lawmakers should make the improved SALT cap permanent. Finally, they shoulda taxpayer can claim (as former President Obama proposed) to prevent wealthy people from eliminating their income tax liability by claiming other tax breaks like the SALT deduction.
Federal lawmakers could also support state and local governments directly bythat would automatically help them cover revenue losses during downturns, as experts at the Tax Policy Center have . Keeping the SALT cap and using its revenues to give state and local governments direct aid would prevent during downturns instead of cutting taxes for the rich.
The reconciliation package gives Democrats a rare and valuable opportunity to invest in education, infrastructure, scientific research and a stronger social safety net - all things that make American society fairer and more dynamic. They shouldn't let a regressive tax break divert hundreds of billions of dollars from these crucial public investments.
Brendan McDermott is a fiscal policy analyst at the Progressive Policy Institute's Center for Funding America's Future.
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