Jason Furman, the former chairman of former President Barack Obama’s Council of Economic Advisers (CEA), slammed Democrats on Tuesday for reportedly agreeing 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 super wealthy.
“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,” the Wall Street Journal reported.
“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 in response to the news. “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).”
According to the Committee for a Responsible Federal Budget (CRFB), the repeal of the SALT cap is a would lead to an estimated loss of $90 billion a year in government revenue.
“For the cost of a two-year SALT cap repeal, policymakers could enact the President’s proposals to provide universal pre-K, expand the Earned Income Tax Credit (EITC) or the Child and Dependent Care Tax Credit (CDCTC), or provide free community college,” the CRFB noted. “One hundred eighty billion dollars is also enough money to offer robust but modified versions of paid family leave, expanded home- and community-based services (HCBS or long-term care) funding, and more generous Affordable Care Act (ACA) premium subsidies.”
“On an annual basis, the $90 billion cost of SALT cap repeal would be enough to fund all seven of these initiatives – pre-K, EITC, CDCTC, ACA subsidies, paid leave, community college, and long-term care,” the CRFB added. “Alternatively, it would be enough to fund a means-tested and reformed version of the expanded Child Tax Credit – meaning each year of SALT cap repeal potentially costs a year of CTC benefits. The annual cost of SALT cap repeal is more than twice as large as the cost of all climate- and infrastructure-related tax credits proposed in the House and nearly three times as large as the cost of closing the Medicaid coverage gap to provide health insurance to Americans in poverty.”
