Nancy Pelosi wants to cut taxes for herself and her fellow millionaires in liberal states. As you may well remember in Trump's tax cut bill, he limited the deductions that can be taken for property taxes in order to keep the rest of America from subsidizing high taxes in liberal states such as New jersey, New York, California, Massachusetts and Illinois.
Now, as part of Phase Four, she wants all limits removed so that you and I can subsidize the rich. President Trump also wants a Phase Four plan but he wants $2 trillion dollars for infrastructure It should be interesting to see how she tries to demonize the president over this. Especially since every Republican can now accuse Democrats of trying to pass tax cuts for the rich.
Fox News reports:
“A 2019 report from the Joint Committee on Taxation projected that of those who would face lower tax liability from elimination of the cap – which only affects those who itemize tax deductions – 94 percent earn at least $100,000. The government would lose out on $77.4 billion in tax dollars, with more than half of that amount being saved by taxpayers earning $1 million or more.”
Pelosi says the move — which would include making it retroactive for the tax years of 2018 and 2019 — would give Americans “more disposable income, which is the lifeblood of our economy, a consumer economy that we are.”
But Senate Finance Committee Chairman Chuck Grassley (R-IA) said it’s a terrible idea.
“This is a nonstarter. Millionaires don’t need a new tax break as the federal government spends trillions of dollars to fight a pandemic,” a spokesperson for Grassley told Fox.
New York, New Jersey, Maryland and Connecticut even sued to repeal the SALT cap, claiming that it unfairly hit blue states. That lawsuit was dismissed by a federal judge, and the states are appealing.
Many wealthy residents have been moving out of those states and fleeing to states like Florida, which has no state income tax. Florida received more new residents than any other state last year, while New York’s outflows to the Sunshine State were the highest – 63,772 people. New York had the third-largest outflows of any state, with 452,580 people moving out within the past year.
Treasury Secretary Steve Mnuchin has suggested that if the states want to prevent this from happening, they should lower their taxes.