Democrats Hand A ‘Reverse Robin Hood’ Tax Cut To Two-Thirds Of The Top One Percent

Democrats’ SALT Deduction Would Give ‘Two-Thirds Of Households In The Top 1 Percent – Making Over $885,000 Per Year –’ A Tax Cut Next Year

COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: “According to the Tax Policy Center (TPC), two-thirds of households in the top 1 percent – making over $885,000 per year – would receive an average tax cut of $16,090 in 2022. This includes more than one-third of taxpayers in the top 0.1 percent of the income spectrum. … These tax cuts are entirely driven by the House proposal to increase the cap on the State and Local Tax (SALT) deduction, which would deliver large tax cuts to the very highest income households.” (“Two-Thirds of the “One Percent” Get a Tax Cut Under Build Back Better, Due to SALT Relief,” Committee For A Responsible Federal Budget, 12/10/2021)

Democrats Are Demanding That Middle-Class Taxpayers In The Rest Of The Country Subsidize Their High-Tax States Because ‘We’ve Chosen … To Tax People To Do Progressive Policies’ And Refuse To Consider Lowering Taxes In Their States

REP. TOM SUOZZI (D-NY): “We need to get SALT to be part of this final package…. We’ve chosen, in our states, to tax people to do progressive policies…. So we’ve done these progressive things in our states, over decades and decades, that end up giving up higher state and local taxes…. Because if somebody leaves our states and goes to a low-tax state, who gets left behind holding the bag? The people that are still in the state that are going to see their taxes go up to make up the difference …” (Rep. Suozzi, Press Conference, 12/08/2021)

THE WALL STREET JOURNAL EDITORIAL BOARD: “[I]n tying that deduction to progressive spending at the state and local levels, participants gave away their real reason for wanting the SALT deduction: It encourages higher state and local spending … Rep. Joyce Beatty (D., Ohio), who also spoke, said Congress needs to deliver SALT relief because too many of her constituents are paying ‘high and often unfair property taxes.’ … But it is telling that the Democratic answer is not to push these localities to relieve the burden by lowering these taxes. Instead they want to underwrite those high taxes with a federal deduction—which means taxpayers in other states will have to subsidize them by paying more.” (Editorial, “Randi Weingarten Says Pass the SALT,” The Wall Street Journal, 12/12/2021)

Senate Republicans: ‘This Is Reverse Robin Hood. It’s Taking From Low-Income Americans And Giving Money To The Wealthiest,’ ‘It’s Giving Tax Cuts To The Millionaires And Billionaires Mostly In The Coastal And Blue States Of Our Country,’ ‘All Of Our States With Lower Taxes Should Not Be Subsidizing All These Ridiculous States That Can’t Live Within Their Means’

SEN. MIKE CRAPO (R-ID), Senate Finance Committee Ranking Member: “The SALT deduction is a wealth transfer from low-tax to high-tax state residents, particularly high-income residents, and punishes residents of low-tax states for their states’ fiscal prudence…. No matter how our Democrat colleagues frame proposals to increase the SALT cap, the proposal is regressive any way that you look at it. Expansion of the SALT cap is a costly [tax] break for people with higher incomes.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)

SEN. CHUCK GRASSLEY (R-IA): “Democrats always want you to believe they’re always worried about the middle class. Well, in this particular time, ‘Build Back Better’ really stands for ‘blue state billionaire bailout.’ … It’s giving tax cuts to the millionaires and billionaires mostly in the coastal and blue states of our country. Democrats are worried about those people. But they want you to believe they’re only worried about the middle class or the lower-income classes.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)

SEN. SHELLEY MOORE CAPITO (R-WV): “I live in one of the lowest participation states of being able to take advantage of the SALT deduction. I don’t want to subsidize the billionaires in these 10 biggest states that are going to be getting the largest amount of benefit from this SALT deduction. The hypocrisy of the whole thing to me is in the first chart. Supposedly, as the President has explained, nobody making under $400,000 is going to bear any tax burden and this is all aimed at helping those who need help the most. However, the second priority is to answer the call of those in higher income tax brackets in states where many of [the Democrats] represent, particularly on the House side…. This is a giveaway to the top and wealthiest five percent in this country.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)

SEN. RICK SCOTT (R-FL): “This is when a blue state like California, New York, Illinois, or New Jersey have high state taxes want taxpayers from states with smaller budgets to pay a portion of their budgets. In a state like Florida, our budget is about half of what New York’s budget is per person. They want our taxpayers to subsidize their taxes. That’s not right. It doesn’t make any sense. All of our states with lower taxes should not be subsidizing all these ridiculous states that can’t live within their means.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)

SEN. JOHN CORNYN (R-TX): “This is reverse Robin Hood. It’s taking from low-income Americans and giving money to the wealthiest…. What the Democrats want to do, in a startling display of hypocrisy, is to get regular working families to subsidize the wealthiest Americans that live in these deep blue states and large urban areas across the country. My 29 million constituents in Texas are not interested in subsidizing bad governing decisions made in places like New York or San Francisco, and they shouldn’t have to…. You see this interestingly enough in the subsidies for electric vehicles. You can buy an $80,000 car, and the federal government, under the Democrats’ proposal, will pay you back $12,500--potentially. The average American drives a car worth about an average $25,000. So you’re going to ask people who can’t afford those expensive cars to subsidize rich people who can afford to buy them by taking money from low- or middle-income families and transferring that to the rich. This is a stunning display of hypocrisy and it deserves to be called out.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)

SEN. JOHN HOEVEN (R-ND): “Democrats continue to push this tax-and-spending bill at a time when inflation is high…. We know inflation is a tax on everybody. On your food, on your fuel, on your housing. It hits low-income people the hardest. Now, Democrats want to double down on that. By increasing taxes and increasing regulation, they are also running the risk of putting our economy in stagflation, which we haven’t seen since the late ‘70s, early ‘80s. That really undermines the wages of working people. On top of all that, they have decided to give their wealthy friends in New York and California a big tax break…. They are giving a big break to their friends--the wealthiest people--while they increase inflation and make it more difficult for low-income people across this country. It makes absolutely no sense.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)

SEN. ROB PORTMAN (R-OH): “What a terrible time to raise taxes on the American economy, American worker and American families. I don’t think any of us expected to support it, but we are really shocked by how bad it is, particularly by providing a huge tax cut for wealthy Americans. Two-thirds of millionaires will get a tax cut under this legislation, primarily because of the SALT cap increase, and other things in this bill…. They are putting forward a bill that not only has this gargantuan new spending and tax increases, but the benefits go to the higher end. I don’t think people think that’s fair. I hope the American people look at this and understand by putting more stimulus in the economy, you increase demand and fuel inflation…. This is what the American people are going to judge. It’s exactly the wrong policy prescription right now. This is just not smart.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)

SEN. THOM TILLIS (R-NC): “It does bear repeating that the wealthiest people in the high-tax states are going to benefit from the SALT deduction…. [The Democrats] should go back to their state houses and their governors and reduce the tax burden on people in California and New York and other states that are high-tax states. If you raise the SALT deduction in those states, you’re not only going to give tax breaks to the wealthy, but give a green light to those governors and legislators to raise taxes because they are going to take some of the edge off with the SALT deduction. It not only harms people immediately and benefits the most wealthy, but represents a clear and present danger that these legislatures will go just a little more up on their state taxes and county taxes. This provision is purely about giving tax breaks to the wealthy and it will ultimately harm the middle class.” (U.S. Senate Finance Committee Ranking Member, Press Release, 12/02/2021)