Politics Lawmakers can't reconcile weakening the SALT cap with progressive goals

21:40  28 july  2021
21:40  28 july  2021 Source:   thehill.com

Five Greybeard UFA Centers Who've Still Got It

  Five Greybeard UFA Centers Who've Still Got It 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 $3.5 trillion budget agreement, 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.

Josh Gottheimer, Thomas Suozzi standing next to a man in a suit and tie: Reps. Josh Gottheimer (D-N.Y.) and Tom Suozzi (D-N.Y.) © Greg Nash Reps. Josh Gottheimer (D-N.Y.) and Tom Suozzi (D-N.Y.)

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.

Who will go No. 1 at 2021 NHL Draft? Owen Power, Luke Hughes among 10 candidates for top spot

  Who will go No. 1 at 2021 NHL Draft? Owen Power, Luke Hughes among 10 candidates for top spot The NHL Draft will be held virtually July 23-24.There was no player that everyone had to know before the year. There was not going to be a #FallinForDahlin, #LoseForHughes, or even a #FailForNail tanking slogan. This was always going to be a draft in which there would be a year-long, thorough discussion about who deserved to become the 58th No. 1 pick in NHL Draft history.

"No SALT, no deal," said Reps. Josh Gottheimer (D-N.J.), Bill Pascrell (D-N.J.) and Tom Suozzi (D-N.Y.), who are just some of the lawmakers 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.

Signing Hart and more: Flyers’ work not done after draft, big trades

  Signing Hart and more: Flyers’ work not done after draft, big trades 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.) previously said that 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 set aside $120 billion in a recent draft reconciliation blueprint for unspecified changes to the SALT deduction, an amount greater than what the Bipartisan Infrastructure Framework earmarks for roads and bridges.

Fortunately, other Democrats across the ideological spectrum have opposed weakening the SALT cap because doing so would give away much needed tax revenues to the wealthy. This group includes both moderates such as Sen. Michael Bennet (D-Colo.) and Reps. Stephanie Murphy (D-Fla.) 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

  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, less than 3 percent of the benefit 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 just 9 percent of tax-filing households earning below $200,000 did in 2018. 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, which far exceeded their 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, have raised or sustained taxes 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 net growth in U.S. households earning more than $1 million took place in the five states that tax them the highest, compared to 27 percent in 2017.

Next NHL defensemen in line for huge free-agent contracts

  Next NHL defensemen in line for huge free-agent contracts 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 should cap the value of all itemized deductions a 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 by creating a fund that would automatically help them cover revenue losses during downturns, as experts at the Tax Policy Center have proposed. Keeping the SALT cap and using its revenues to give state and local governments direct aid would prevent regressive budget cuts 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.

OVERNIGHT ENERGY: Biden administration rolls out clean car goals | White House unveils extra $3 billion in local disaster funding .
HAPPY THURSDAY!!!! Welcome to Overnight Energy, your source for the day's energy and environment news. Please send tips and comments to Rachel Frazin at rfrazin@thehill.com. Follow her on Twitter: @RachelFrazin. Reach Zack Budryk at zbudryk@thehill.com or follow him at @BudrykZack. Today we're looking at the Biden administration's new clean car goals and some additional money flowing to resilience efforts. DRIVING CHANGE: Biden administration rolls out clean car goalsThe Biden administration on Thursday set a goal of making half of new vehicle sales in this country electric by 2030 and released new details on shorter-term proposals intended to push the market

usr: 1
This is interesting!