Jason Furman, the former chairman of former President Barack Obama’s Council of Economic Advisers (CEA), slammed Democrats on Tuesday for reportedly closing in on a deal that would repeal the cap on the deduction for state and local taxes (SALT), which would amount to a tax cut for the ultrawealthy.
The Wall Street Journal reported:
The party is still working through a few other issues in the bill, including immigration and measures curbing carbon emissions, and lawmakers also closed in on a plan for repealing the cap on the deduction for state and local taxes.
Reuters noted that repealing SALT is important to Democrats because it hits high-tax states along the coasts that represent the core of the Democrat Party.
“My guess is the majority of Americans with a net worth of $50 to $300 million would get a tax cut under the Build Back Better plan with a full repeal of SALT,” Furman wrote on Twitter. “The bill would do more for the super-rich than it does for climate change, childcare or preschool. That’s obscene.”
“Some billionaires would get a net tax cut from Build Back Better + SALT repeal,” Furman added. “I haven’t run the numbers on net worth but the SALT deduction is worth much more than any of the tax increases for people making up to $10 million (because most of the tax increases don’t kick in until $10 million).”
Furman said that if a person’s wealth was $200,000,000 that their income was likely to be below $10,000,000. He said that under the SALT provision, combined with the rest of the bill, households making up to nearly $40,000,000 “will get a net tax cut.”
“There are people with a net worth of $1b with annual incomes less than $40m,” he added. “If they’re living in California then chances are BBB + SALT repeal will give them a net tax cut.”
I haven't run the numbers on net worth but the SALT deduction is worth much more than any of the tax increases for people making up to $10 million (because most of the tax increases don't kick in until $10 million). https://t.co/p1cTdyglO7
— Jason Furman (@jasonfurman) November 2, 2021
Socialist Sen. Bernie Sanders (I-VT) slammed the news that Democrats were pushing for repealing SALT, saying that it was “beyond unacceptable” and that he would not support the plan:
According to media reports, Democratic negotiators are working on a repeal of the SALT deduction cap for up to five years, which would cost $475 billion and give the richest 5 percent $400 billion in tax cuts. As a result, the top 1% would pay lower taxes after passage of the Build Back Better plan than they did after the Trump tax cut in 2017. This is beyond unacceptable.
At a time of massive income and wealth inequality, the last thing we should be doing is giving more tax breaks to the very rich. Democrats campaigned and won on an agenda that demands that the very wealthy finally pay their fair share, not one that gives them more tax breaks. I am open to a compromise approach which protects the middle class in high tax states. I will not support more tax breaks for billionaires.