Taxes

Bernie Sanders Is (Mostly) Right About the SALT Deduction

The state and local tax deduction overwhelmingly benefits rich households in high-tax states while shifting their federal tax burden to everyone else.

|

In July, with the country battling a deadly pandemic and the economy staggered by a combination of high unemployment, government-imposed lockdowns, and rising debt levels, then-Senate Minority Leader Chuck Schumer (D–N.Y.) outlined his biggest priorities for Democrats if they were able to take control of Congress.

Right at the top of the list? Cutting taxes for wealthy Americans in high-tax states like his own.

"I want to tell you this: If I become majority leader, one of the first things I will do is we will eliminate it forever," Schumer said during a July 14 press conference on Long Island. "It will be dead, gone, and buried."

"It" in this case was the cap on the state and local tax (SALT) deduction, which was imposed as part of the 2017 federal tax reform bill passed by Republicans and signed by President Donald Trump. As a result of that law, Americans are allowed to deduct a maximum of $10,000 in state and local tax payments from their federally taxable income; previously the deduction was uncapped, and it overwhelmingly benefitted the richest households while shifting their federal tax burden to everyone else.

Unsurprisingly, that's why repealing the cap has become a major priority for Schumer and Speaker of the House Nancy Pelosi (D–Calif.), whose constituents stand to benefit more than most Americans. Now, Democratic support for repealing the SALT cap could complicate the passage of President Joe Biden's $2.25 trillion infrastructure plan, as some members of Congress have vowed not to vote for the infrastructure bill unless it repeals the cap.

Special tax breaks for the wealthy, it turns out, are infrastructure too!

Sen. Bernie Sanders (I–Vt.) is correct to point out, as he did in an interview with Axios this week, that the SALT cap creates a serious optics problem for Democrats. Sanders says he will oppose Schumer's effort to attach the SALT cap repeal to the transportation bill because "it sends a terrible, terrible message when you have Republicans telling us that this is a tax break for the rich."

To be clear, it is not just Republicans saying that. Richard V. Reeves and 

Spending enough money on campaign ads can fix even the most inconsistent messaging problems, of course. But the SALT cap debate also presents a major policy problem for Democrats that's likely to be more difficult to solve.

At its core, Biden's policy agenda amounts to a promise that the government will take on a larger role in just about every aspect of ordinary Americans' lives, helping pay for everything from child care to in-home assistance for the elderly via expanded tax credits, direct subsidies, and an expanded role for Medicare and Medicaid.

All of this, Biden explained in last week's joint address to Congress, will be financed by higher taxes on the rich. "We can do it without increasing the deficits," he said in touting his American Families Plan. Instead, the rich will be expected to pay more. Specifically, Biden has proposed raising the top income tax rate to 39.6 percent from 37 percent, along with hiking taxes on capital gains so they are taxed more like ordinary income.

"When you hear someone say that they don't want to raise taxes on the wealthiest 1 percent or corporate America, ask them: 'Whose taxes you want to raise instead?'" Biden said.

Regardless of whether Biden's scheme to hike taxes and grow government has merit, this means Democratic support for repealing the SALT cap isn't just an intellectual inconsistency or an awkward messaging problem. It's a fundamental misalignment of the basics of the party's agenda. A more expensive government that provides benefits to more people, the argument goes, must be financed by those who can most afford to pay—but only after we hand them a giant tax cut? Repealing the SALT cap would add roughly $500 billion to the deficit. Whose taxes do you want to raise instead to close that gap?

In short, Democrats can be the party that demands wealthy Americans pay higher taxes or they can be the party that favors the SALT cap repeal. Trying to be both requires more than just serious mental gymnastics. It probably means sacrificing a significant portion of Biden's agenda to pay off political allies in New York and California.

NEXT: CDC Greatly Exaggerates Risk of Outdoor COVID-19 Transmission

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. “At its core, Biden’s policy agenda amounts to a promise that the government will take on a larger role in just about every aspect of ordinary Americans’ lives, helping pay for everything from child care to in-home assistance for the elderly via expanded tax credits, direct subsidies, and an expanded role for Medicare and Medicaid.”

    Promises made, promises kept.

    Read the democratic party platform, people.

    1. I can’t read Mandarin.

      1. Congrats- you win stupid comment of the day.

        1. They so badly want the China-Democrat axis to be true so that have a “both sides” talking point with regards to GOP-Russia.

          1. De Opresso Liber = OhLookMarketthugs

          2. Is there anything you won’t defend the DNC on?

            I mean, you’re still pushing Trump Russia. LOL.

            Obama/Clinton were far more kind to Russia in every policy aspect. Biden has been as well.

            As for China/Democrats, just look at the connections they have, the deference in policies, the exclusion of China from enforcement.

            You really are a leftist.

            1. Making money online more than 15$ just by doing simple work from home. I have received $18376 last month. Its an easy and simple job to do and its earnings are much better than regular DD office job and even a little child can do this and earns money. Everybody must try this job by just use the info
              on this page…..VISIT HERE

            2. Making money online more than 15$ just by doing simple work from home. I have received $18376 last month. Its an easy and simple job to do and its earnings are much better than regular DSD office job and even a little child can do this and earns money. Everybody must try this job by just use the info
              on this page…..VISIT HERE

              1. Your level of English means you’re either an idiot, a liar, a bot or an Indian scammer. I hope your computer blows up and burns your house down so that you can get out and get a real job.

                1. You hope they get out?

          3. It is true. At least to a large extent. FFS, Swallwell is still on the House Intelligence Committee after he was found to be fucking a Chinese spy behind his wife’s back. And that’s just one ‘troubling’ instance.

          4. 周白扽 ? Nah, not him

        2. Congrats shitlunches – you’re proof that the ability to understand humor is an indicator of intellect.

      2. I took it as a joke about “Mandarins” as the ruling class. Though I suppose maybe it was a joke about small oranges. 😉

        1. Could be Iron Man’s arch enemy.

    2. That sounds like Sanders’ dream – so why is he opposed?

    3. What’s the threat level of his tweeting?

      1. Insurrectionism!

    4. I read the communist manifesto, seems identical.

      1. It really is about the same as the DNC platform. The Bill of Rights isn’t.

  2. they’re fucking with us. and taxation is theft.

  3. Spending enough money on campaign ads can fix even the most inconsistent messaging problems, of course.

    So, campaign ads are infrastructure too?

    1. I’d like to see Hoe Xiden either spell infrastructure or say it three times quickly without turning it into word salad.

  4. Kill the SALT deduction entirely. Let the high tax states fix themselves or deal with it.

  5. Oh, please. A $10k/year SALT deduction is hit by a lot of normal working people.

    1. No it really isn’t. If you’re paying 10k in state taxes alone, your pay off the local rich. Your not could retire right now rich, but your able to afford week vacations in Hawaii rich (if that is how you choose to prioritize your spending).

      1. Try finding a home on Long Island or in New Jersey within 90 minutes of Manhattan that doesn’t come with at least $15k in annual property taxes attached to it.

        1. “within 90 minutes of Manhattan”

          That’s your problem right there. In several locations in Michigan, I’ve never paid over $1600/year in property taxes. You choose to live in one of the highest-cost parts of the country, and want to pass the costs to the rest of us.

      2. Since property taxes and likely sales taxes are state and local, I would figure if most people were itemizing, the amount that hit 10k would be pretty substantial.

    2. Outside of a few high-tax hellholes, no it’s not. Across most of the country, state and local income taxes are in the 2-5% range. Assuming the high end, you’d have to earn over $200,000 per year before paying your first dollar of SALT-protected deduction. And even that simplified approximation assumes no deductions. Realistically, SALT deductions aren’t relevant to non-Californians until you earn $250-500k.

      1. A lot of people live in “high tax hellholes.” That the GOP forgot this and/or couldn’t properly explain that the offsets elsewhere represented a net positive to upper-middle income voters in swing districts is why they’re in the minority in the house.

        Aside, it’s state plus property plus sales taxes. Here in PRNJ you can get to $10k on property tax alone living in a modest house in a modest town. My own combined prop+inc taxes as a married filer in 2014 were $14K on $120K AGI; If I didn’t know any better, I’d assume that Trump just jacked up my Fed taxes by $1K even though I was decidedly not rich, and a lot of people did.

        1. So why should people living in these “high tax hellholes” get to offset their cost of living onto the rest of the country?

          Are you willing to pay 50% more for your groceries because groceries are more expensive in Hawaii? Are you willing to pay 100% more for your house because homes are expensive in San Francisco? Why should taxes be any different?

          1. So why should people living in these “high tax hellholes” get to offset their cost of living onto the rest of the country?

            So not taking is giving? We’re usually against that rationale when it comes to tax cuts. And thanks to the progressivity of the tax code, the high COL isn’t really being offset.

            But why are we advocating the further erosion of the place of the states in the constitutional order? There’s been far too much of that already. I want to incentivize policy making at the state or local levels wherever possible – by putting FedGov to the same place in line for tax revenue as StateGov you lose an incentive to do so.

            1. Shouldn’t your complaint be with NJ, not the Feds?

          2. 100% would be a *very* low estimate of the price difference between SF real estate and most other places.

          3. Fuck ‘em. They elected a bunch of commie faggots to tax them to death and then want a freebie from the rest of us when the bill comes due.

            Democrats can roast alive and/or in Hell.

          4. Why does the rest of the country get to skate by with an unadjusted progressive income tax system? Adjust the income tax brackets by cost of living and you can have your SALT cap.

        2. Well, GTFO out of the PRNJ.

          1. Chris Christie made it illegal for my wife to continue working at her current job if we were to move to PA. So if local tax differences can make up for that $75K and all the time spent driving my kids to their relatives around the state then I’d be happy to do so.

        3. The people living in those high-tax hellholes have no one to blame but themselves. The GOP didn’t forget that – it’s central to their philosophy of personal accountability.*

          You are correct that SALT includes income, property and sales. That said, basically nobody can claim the sales tax component because it’s practically impossible to keep the necessary receipts to the standard the IRS demands. Maybe you’ll factor in the purchase of a new car or a yacht – but that’s not helping your case that the SALT deduction is only beneficial to the rich.

          Re: property taxes – You’re still not making your case. Yes, yours are high – the highest in the nation in fact. And you (or your neighbors) voted for it. The median of property taxes (by state) is about a third of NJ’s rate. Cost of living is also a lot lower in “fly-over country”. You live in a high-tax hellhole. Why should the rest of us subsidize your lifestyle?

          * Yes, I know there are lots of GOP politicians who are utter hypocrites on the topic of personal accountability. But it is at least something they claim to aspire to. The D platform of collectivity rejects the very concept.

          1. The people living in those high-tax hellholes have no one to blame but themselves. The GOP didn’t forget that – it’s central to their philosophy of personal accountability.*

            Whether or not this is true, they certainly did a shit job selling it as such. They got shellacked all over the competitive areas of this state with D candidates specifically flogging this issue first and foremost. It was terrible politics – they gave up a bunch of seats with the end goal of a) fomenting tax revolts led by the people whose interests they just ignored and/or b) enhancing the clout of red states in the house over several decades. The fallout from 2020 is that strategy blowing up in the GOP’s face.

            1. When you add in “loan forgiveness”, there is no real option to describe Dem proposals as anything but giveaways to the 1%.

        4. Well then, look at where the BULK of those taxes go. I live in a tax happy state but the bulk goes to the chilrun aka the Schools run by union communists. I’d love to see that government monopoly shattered into a million pieces and create private schools, home schooling or even some drunk pontificating from a soap box in a park which would far exceed the tripe the public schools peddle now as an education.

      2. Average home price in Austin, TX was $344,000k last year and quickly rising, on which the property taxes were $8,800 all by themselves. No income tax, but sales tax is also a SALT tax component and is deductible, so I can definitively say that the average homeowner in Texas hits the cap. That is not the rich, and Texas is not the worst by far.

        Here is a quote by the NYT – Before the 2017 tax cuts, the average SALT deduction in New York was $22,169 — twice the national average of $10,233.

        Average was above the cap in 2017.

        1. How much of that was Texas and how much of that was blue-city taxes?

        2. You jumped from the average homeowner in Austin to the average in Texas. Those are 2 different things. I am a tax preparer in the North Houston Suburbs. Anyone that hits the cap is because they have one impressive home on the lake or because property tax can be deducted on 2 homes. It isn’t the average Texan that is hitting the SALT tax.
          Side note: most all the ones that hit it work in the oil and gas industry.

    3. “A $10k/year SALT deduction is hit by a lot of normal working people.”

      Her in East TN you only hit that sort of taxation if:

      A) You live within city limits so pay both City and County taxes AND
      B) Your house is worth in EXCESS of $750K

      Which is not many “normal working people” other than board certified medical specialists.

      1. Haha you live in the asshole of America!

        1. you are the asshole of America

        2. flag for the asshole

        3. Tennessee is actually quite nice. And largely devoid of Marxist trash, like you.

          1. The fewer Marxist assholes, the nicer your state. The nicer your state, the more Marxist assholes want to move there.

            Regressing to the mean. ugh.

    4. 10,000 is hit by a number of upper middle class people. But while we might deduct a few thousand more, Bezos will get tens of millions in deductions.

      1. Bezos undoubtedly qualifies for the AMT and is SALT-ineligible.

    5. Brian…I live in the Peoples Republic of NJ and I would say it is insanity to do away with the SALT cap. Over time, that will force fiscal discipline. The fact is, NJ is losing population rapidly. That will affect revenues.

      1. Why don’t you move to Israel?

        1. One day perhaps. As soon as the trash is removed.

    6. Then perhaps those “normal working people” should discuss high tax rates with the people they voted into power.

    7. The standard deduction is 25,100 for a couple filing jointly. To get the SALT you have to itemize. Even middle class people with 10k in state and local taxes rarely find it makes sense to itemize.

  6. Brookings Institution, calculated last year that 96 percent of the benefits of a SALT cap repeal would go to the top 20 percent of earners, with the top 1 percent getting 57 percent of the benefits.

    Just took a look at the stats on NTU’s website – these benefits almost exactly match the tax burden of the top 1% and 20%. Interesting correlation.

  7. “The state and local tax deduction overwhelmingly benefits rich households”

    Picking policies based on whether they help or hurt the wealthy is for Marxists and socialists. I don’t know what you are, but I’m a libertarian capitalist. Marxist and socialist arguments are generally stupid and almost always wrong. Pick policy using your horoscope might be less destructive to the economy.

    Deducting state taxes is an awful policy because it allows some states to keep their tax rates higher than they would be otherwise. The money the government consumes–state government or otherwise–stays out of the private sector, and capitalism is about keeping money and resources out of the hands of government.

    Federal taxes are also, presumably, higher than necessary (in states without an income tax, too) in order to make up for the revenue the feds don’t receive because people in California and New York are deducting the taxes they paid in their state.

    There’s a libertarian argument to make that residents in a state without an income tax are effectively paying taxes in states with one if California can build its bullet train with money that its residents don’t pay to the federal government.

    That’s a problem because of a central premise of American democracy–no taxation without representation. If non-Californians are paying more in federal taxes, effectively, so that California can build itself a bullet train with that money, then principle dictates that either federal taxpayers should be allowed to vote in California’s elections or California shouldn’t be allowed to spend what should be federal taxpayers’ money.

    1. You would have a point if California was at all a taker state- but it’s not. Indeed the “theft” goes the opposite way- California could provide much more and keep their own money if other states weren’t consistently raiding its coffers (same with NY, etc.)

      https://worldpopulationreview.com/state-rankings/donor-states

      The real joke of it all is that the so called “conservatives” and “libertarians” continually argue for a system that rewards freeloaders- ie. the taker states.

      1. This has been debunked. It doesn’t reflect which states get more federal money, it’s merely a metric of where federal tax dollars go. And since the vast majority of the federal budget is Social Security and Medicare, this metric is mostly measuring where retirees tend to retire (which, surprise surprise, is in states with low state taxes and not states with high state taxes).

        1. States don’t pay federal income taxes.

          1. But states do receive federal grants for various expenses. And the metric posted above says nothing about any state receiving more in federal grants than its residents paid in federal taxes, which is the lie that leftists are pushing.

            1. The question here is about why individual federal taxpayers shouldn’t be allowed to deduct state taxes from their individual tax returns.

              Because some states have more residents than other states doesn’t even address that question. It’s a non-sequitur, which is why raspberry is wrong again.

              1. …which is why raspberry is always wrong again.

                1. He’s worthless prog garbage.

              2. Why do you believe that residents of high-tax states should be permitted to lay off their tax burden on those of us who were smart enough to live elsewhere?

                1. You seem to have misread my intent.

                  The question is why individual federal taxpayers shouldn’t be allowed to deduct the taxes they pay to their state, and the excellent answers have to do with justice, liberty, democracy, and capitalism.

                  My intent is to show why individual taxpayers shouldn’t be allowed to deduct state taxes from their federal taxes.

        2. Because there are more wealthy people in some states, doesn’t mean those states are paying any taxes at all. Every individual’s federal taxes are calculated using the same rules–regardless of the state in which they reside. Because you live in a state that taxes your income shouldn’t make any difference on federal taxes. If you want to pay less state taxes, vote for different representatives to your state legislature.

        3. Funny how conservative debunking never includes the math that the original facts do. Always some little pesky asterisk worthy mention, but never anything the debunkers can quantify.

          I don’t think Ohio is a major retiree destination, nor is Maryland or Alabama or W. Virgina. Those places are full of non-productive, superstitious, and ill-educated, though. And in fact, we can check the states by number of SSI recipients. And what do you know, your SSI-driven theory is not looking very well supported, especially when you drill down to the data of age granted SSI vs disability granted SSI. (Alabama stats tells a story particularly well in this difference.)

          https://www.ssa.gov/policy/docs/statcomps/ssi_sc/

          1. Bro, you think two plus two equals five. You shouldn’t be accusing others of bad math.

            1. LOL. was he one of those?!?

            2. or being ill-educated

          2. Funny how you rush to defend every idiotic talking point of the left. Other factors you have to adjust for are military base buildup, contractor costs, transportation (a highway through Iowa costs more per capita due to density, but benefits transport costs for urban areas), etc.

            You’re a simpleton. One who rushes to defend leftists in literally every thread these days.

          3. Then cut federal
            Spending, taxes and government. We are agree!!

          4. Funny how you are automatically on the side of democrats on every issue always.

        4. I looked up the stats a few years back. California was absolute number one in total federal dollars it “got back”. The combined total for the 10 highest so called taker states was less than what California got.

          1. Yeah, that’s the other side of this equation.

            When they say California “got back” money, don’t they mean they gave the money to the poor through some welfare program?

            I’ve owned businesses, lived in, and paid taxes in California, and when they pay for some fuckers free food and rent, I don’t get a goddamn thing.

            The state gets money back?! I’m the one paying the taxes! Why is the state getting money “back” that it didn’t earn in the first place? That’s my money, and I’m not getting it back through federal spending at all.

        5. It’s also a measure of where the federal government has a lot employees. Notice how Virginia is by far the biggest “taker” state (almost twice as high as the next one) despite having a median income above the national average and more on par with the other “donor” states.

          Its because the Virginia suburbs of DC have a lot of federal agencies and employees, and thus receive a lot of federal dollars

          1. Military bases are the same way. Expensive places generally in red areas.

            1. We believe you.

          2. Yeah, I think having the nation’s principal naval base may also have a bit to do with it.

      2. States don’t pay federal income taxes, and anyone who thinks they do is wrong.

        Individuals pay federal income taxes, and each of them pay by the same federal rules in every state. There isn’t any individual or couple who pays more in federal taxes because he or she resides in California.

        There’s a word for people who believe things that have no basis in reality. They’re called “delusional”.

        There is no good reason why individuals in California should pay less federal taxes than they would otherwise just because of the state in which they reside.

        1. Forget it, Ken. It’s shitlunches.

        2. So states that tax and pay for their own programs should have to also pay for states who do not tax and pay for their own services, and rely on Federal funds instead? Sounds like you are blessing off on free riders.

          1. States with the highest state taxes:
            CA, HI, NJ, OR, MN, NY, VT – All blue states, all max at 8.7% or higher. They also control 112 seats in Congress. If they have a problem with “free riders”, they have the capacity to affect it.

          2. “So states that tax and pay for their own programs should have to also pay for states who do not tax and pay for their own services”

            I think you’re misreading something I wrote if that’s what you think I wrote.

            States should get their income tax revenue from the residents of their own state. If your state can’t spend as much as you want without helping themselves to federal income tax revenue, then your state should either raise their taxes or cut their spending.

            No continuous federal bailout for high tax states.

          3. Citation? What program exactly are you inferring here. or did you make up something in ignorance?

          4. No, because that’s all bullshit, like you.

      3. Wow… idiots still repeat this idiotic talking point? The one that doesn’t remove SS/Medicare costs as even a first estimate. Because someone moves from a high tax state to a low cost of living area… you think the state should be punished when the individual is merely trying to stretch their dollar.

        I really thought this idiotic talking point was over.

      4. You mean the yokels pulled a fast one chiseling you out of your money? LOL!

      5. If you really wanted to make this difference go away you’d kill the progressivity of the tax code which for some reason is a non-starter in the US.

      6. Perhaps if the elderly could afford to live in NJ NY, etc…that laughable stat would have some level of meaning.

    2. California provides crap tons of tax revenue to the feds and most of federal assistance to states go to red states(9 out of ten of the states most dependent on federal funding are reliable republican states). So don’t shit on california for taking a little bit of federal money, its our money too. California relies LESS on federal government than TEXAS, the state that’s all about Laissez-faire
      economics and all that stuff.

      https://www.moneygeek.com/living/states-most-reliant-federal-government/

      1. See the discussion above – which, from the timestamp of your comment, was already in the thread. The statistics you cite don’t say what you think they do. They merely reflect where SSI and Medicare beneficiaries mostly retire to.

        Now if you ran that same analysis without SSI or Medicare, you’d have a usable statistic. (And, yes, you have to exclude them on both the revenue and expense sides.) A few states with large military bases but small populations (such as North Dakota) would be outsized beneficiaries. But for the most part, the red state/blue state difference goes away.

      2. Yes, if you’re a simpleton who doesn’t understand things like shared benefits, you will blindly keep repeating this study over and over. it is the simple thing to do. Wrong, but simple.

        1. People like him and DEL are dishonest propagandist shitweasels.

      3. “California provides crap tons of tax revenue to the feds and most of federal assistance to states go to red states”

        Explain why this means that individual taxpayers should be able to deduct state taxes from their federal income taxes.

        What does being in one state or another have to do with paying federal taxes? An individual’s federal income taxes are calculated the same way in every state.

        Do right handed people pay more than left handed people? Why does arbitrarily sorting people by state justify some of them actually paying more in income taxes than others, when their federal income taxes are all calculated the same way–regardless of whether they’re in a group of people who can play the piano, a group who rides motorcycles, or a group that lives in California?

        If you live in a state with an income tax, and you don’t like it, the proper response is to vote for state representatives who support cutting taxes and spending–rather than handing the rest of us, who are not in your state, the bill for your state’s spending. I don’t live in New York. If you want to pay less state tax, the answer is in Albany.

        1. “Explain why this means that individual….”

          Individual being the key word.

          There is little point arguing with him, or any of the others arguing for a return to a higher SALT limit.

          Because they are collectivists.

          1. That’s the genuine issue, there. People have come to think of themselves collectively on this issue, through conditioning or something–as if the group identity “Californian” or “New Yorker” had some substantive meaning on this issue.

            They’re individuals filing individual tax returns on the basis of their individual incomes for that year, and it doesn’t matter which state he or she resides in, the tax is calculated the exact same way whether in California, Utah, Minnesota, or South Carolina.

            But we’re supposed to give some people an arbitrary deduction (and everyone else more to make up for it) based on an irrelevant group identity that has no rational application, on this issue, apart from it justifying more government than we’d have without it.

    3. “residents in a state without an income tax are effectively paying taxes in states with one ”

      They can deduct their sales taxes, in that case. It’s an either-or deduction.

      1. Some states have higher tax rates than others. If that weren’t so, this wouldn’t be an issue.

        Again, if you want lower taxes, move to a lower tax state, or vote for better representatives to your state legislature.

        The biggest long term problem California faces is our inability or unwillingness to take who we elect to Sacramento seriously–apart from the governor. If we started voting for the state legislature on the basis of taxes and spending, exclusively (at the expense of other issues), California might quickly become a libertarian paradise.

    4. I agree Ken, but in addition I have a little different take on it. Income taxes are supposed to be based on ability to pay, before taking into account expenses used to benefit the taxpayer. In other words, based on discretionary income. You can’t deduct discretionary expenses in arriving at taxable income, with some notable exceptions like mortgage interest (which is a dumb deduction). Some might view SALT as non-discretionary expenses, much like medical costs and casualty/theft losses. Therefore, they should be deductible. But SALT can, and should, be viewed as expenses of the state and locality that are used to benefit the residents. Thus, they are akin discretionary expenses. While many of those expenses don’t benefit the taxpayers (I live in California, so I know too well), many are, and the Feds shouldn’t be in the game of parsing those expenses. As many have said, if your SALT aren’t benefiting you, take it up with your state and local politicians.

  8. It’s revealing the left’s Hero to the Revolution is concerned only about the optics rather than about benefitting the rich (like himself).

    1. This is pretty damn dumb. The guy clearly states his mission and if you hadn’t noticed- his policies would have always “hurt” people like him more by levying higher taxes on the wealthy.

      No one has ever said that having his “socialist” policies would ever mean that everyone has to be poor. Is that how it is in every western nation in Europe? Are they all beggars? Oh wait? You mean they still have millionaires and such? Oh heavens, who ever would’ve thought that you could have a sensible floor and others could still hit the stars. What a fascinating concept.

      Try thinking more before typing. It’ll help.

      1. It’s revealing noting in your comment addresses the point that Sanders is only interested in the optics rather than the policies.

        Think more about how to address the issues rather than your typical distractions and maybe someone will care about your idiotic comments.

  9. The real problem is those states are net donors to a system that continually fucks them. Seems only right to have the SALT system in the libertarian view. How?

    The states can tax more of their own citizens and respond more directly to their own citizen’s ideas and desires rather than shuffle it off to an ineffectual federal government. Isn’t that the end goal? More power to the states?

    By limiting the Fed’s take, a place like California can implement whatever amount of tax-funded programs they want while Alabama or Kansas can cut whatever amount.

    It’s far more egalitarian/libertarian to keep the dollars in the states that produce them. Indeed, the entire reason the Rs even did it is because it was a direct broadside to wealthier blue states that didn’t harm the red states at all (due to their low taxation and history of being net takers anyhow.)

    I feel a true libertarian would argue that keeping tax dollars (and therefore citizen power) concentrated at lower levels of government is more beneficial than sending it off to the feds where power will only continue to grow.

    1. The real problem is those states are net donors to a system that continually fucks them.

      They could vote to reduce their state tax burden rather than demand residents of other states subsidise their tax burden…

    2. What the Fuck do you care? You live in Oklahoma.

    3. Conservatives love affirmative action and welfare — for them. Affirmative action in presidential elections and house seat apportionment, and welfare for Alabama, W. Virgina, Wyoming, and other red-state powerhouses (lol).

      1. Keep telling us how you are not a collectivist statist while whining about the electoral college and state representation in the Federal government…

        1. Keep telling us how easy Tennessee isn’t a backwoods shithole.

          It shows how uneducated you’re that you’d mention you live in such a shithole.

          1. asshole gets second flag

    4. Great. I agree! So here’s a plan. Strip the federal government back to it’s 18 enumerated as designated in the constitution. Including eliminating cabinets level departments and regulations. Then reduce federal taxation back to a level sufficient to fund those lawful activities.
      The states can each establish their own taxation scheme and do their own thing. Then the feds can largely leave the states alone.

      I endorse your plan Raspberry!

  10. Reason seems to approve of a lot of Trumps policies, now that he’s gone.

    1. Only when they can filter them through the lens of a self identified socialist.

      Because doing it any other way might give them icky limited government no cocktail party invite cooties.

      1. You live in a redneck shithole

        1. You add nothing to the conversation or the world. Maybe you should Sevo’s advice.

        2. 3rd flag for the asshole

        3. You are a redneck’s cornhole.

  11. I guess he’s angling for that fourth house (like many Vermonters already have).

  12. OT: Climate Jihad leftists are coming for the Fed chair:
    https://www.politico.com/news/2021/05/11/fed-chair-powell-biden-left-486746

  13. If I was writing the SALT tax deduction changes to fck blue states, I would have implemented a matching tax as well. Your federal tax rate is your state tax rate + 10%.

  14. As usual, the US approach is geared towards encouraging cronyism and partisanship and zero-sum conflict.

    Switzerland has a better approach. At their federal level, they set a broad tax base but with low marginal rates/burden (3% VAT on ‘necessities’, 8% VAT on else, 12% income tax, 0.5% wealth tax). The cantons can set their own tax base and rates.

    But both the federal and canton level integrate those calcs and payments. In order to produce, for taxpayers/filers, a single tax form.

    The result is that their federal level taxes at levels we haven’t seen in the US since the 1920’s. While cantons can tax at rates that are different enough so that they look like Europe in one canton and the Caymans or other tax havens next door.

    Probably can’t work here since it seems we don’t actually have an interest in solving anything. Only in arguing about it and pissing off our partisan enemies.

    1. Now now, JFree. You know we cannot possibly look to other countries in order to solve problems here. Because America is EXCEPTIONAL. We do everything ourselves and screw the rest of the world.

    2. Switzerland is a tiny landlocked country with 8 million people.

      It’s not an example for anything.

      1. That’s right. The American way is the best way even if there are better examples and even if the American way sucks.

    3. The Swiss federal system of cantons is the best system of government currently in the world, imo. Damned difficult to emigrate there.

  15. It seems like everyone on this thread is in agreement on one thing. CUT Federal Spending, shrink federal government. Drown the feds in the bathtub, eliminate federal income tax, fund with a flat sales tax. No one needs to waste their time on deductions or loopholes! Problem solved

  16. Not surprised at all by the comments here. Cutting taxes is good, except when those tax cuts disproportionately benefit blue states. Then, cutting taxes is terrible!

    It just goes to show how far Team Red has devolved into narcissism. Used to be, they would defend tax cuts on their own merits. People keep more of their own money, invest in things that they want instead of giving government more money and power, etc. But NOW, it’s clear that they have given up the pretense of a rational economic argument in favor of tax cuts. It is just about more money for THEMSELVES.

    Team Blue uses direct government spending to buy votes. And, now, Team Red uses tax cuts (AND government spending) to buy votes.

    1. I’m not surprised by any of the left wingers’ comments here. They used to pretend to be against special interest tax breaks but have suddenly revealed they are supporters they are the beneficiaries.
      Everyone has long known their branding as champions of the poor is bunk, they are only interested in benefitting themselves.

      Cutting taxes is good, except when those tax cuts disproportionately benefit blue states. Then, cutting taxes is terrible!

      It’s quite easy for intelligent people to recognize a particular tax break is distortionary and discriminatory and to support limits on them. It would of course be better for those savings to be offset with broader tax reductions. But since no one on Team Blue is capable of any understanding beyond freshman level gotchas we’ll have to content ourselves with mocking the idiots.

      1. Since when has Team Blue been against special interest tax breaks as a general principle? They are against special interest tax breaks for people they don’t like, and are in favor of special interest tax breaks for people they do like. Team Red used to have a more principled position on the matter. Now, they are just the mirror image of Team Blue on the matter.

        Everyone has long known their branding as champions of the poor is bunk, they are only interested in benefitting themselves.

        And now Team Red has caught up to them. Congratulations, pat yourselves on the back!

        It’s quite easy for intelligent people to recognize a particular tax break is distortionary and discriminatory and to support limits on them.

        LOL what a rationalization. Every single tax break, short of repealing all taxes, is “distortionary and discriminatory” on some level. If the government cuts capital gains taxes, it is implicitly favoring capital gains over wage income. If the government cuts income taxes, it is implicitly favoring wage income over other types of income. Etc. So, why don’t you enunciate your principled, neutral, nonpartisan standard for when a particular tax break is too “distortionary and discriminatory” in order to be considered problematic. You don’t have one, because in this case it is clearly a situation of Team Red going after Blue states.

        1. Since when has Team Blue been against special interest tax breaks as a general principle?

          Ever since the word loophole was invented.

          And now Team Red has caught up to them. Congratulations, pat yourselves on the back!

          You can always identify the douchebag. He’s the one who recognizes who starts the problem but attacks the person defending themselves anyway.

          it is clearly a situation of Team Red going after Blue states.

          So what? Your only interest is partisan hackery, did you think no one would ever retaliate?

          You don’t have one,

          I outlined it but you’re too stupid to understand it or to bother with.

          1. At least you’re finally honest – this is just partisan payback, regardless of any “distortionary” effect that tax cuts have.

            1. It’s a sign of stupidity you can’t recognize something can be both unfair and against your enemies interest at the same time. Reasonable people agree that eliminating distortions is a good thing.

              this is just partisan payback,

              So your worst accusation is “you’re just like me”. It’s revealing those who punch first whine when others punch back, but certainly never criticize their own first punch or consider not instigating fights in the first place. This is why left wingers are a waste of time.

              1. LOL there you go. Trying to drag me down into the mud with you. No, sorry, I’m actually not a partisan jerk like you are. But keep pretending that what you are doing is right and moral just because “the other side does it too”.

                1. Trying to drag me down into the mud with you.

                  Wrong, I’m stepping on you while you’re drowning in the mud.

                  I’m actually not a partisan jerk like you are.

                  True. You have nothing besides partisanship while almost everyone else has it as only a small component of their interests. But since the left is currently the danger for our country all rational people are anti-left.

                  keep pretending that what you are doing is right and moral just because “the other side does it too”.

                  It’s not “the same thing. The left created the unfairness and I support making it less extreme. Between us you still support the most unfair position, and whining that making it more fair is in fact unfair recalls Buckley’s adage that pushing someone into the path of the bus and pushing someone out of the path of the bus cannot both be accurately summarized as two people pushing someone.

                  But it’s not surprising to anyone you do. These are the games left wingers play and it’s why idiots are drawn left.

                2. You are highly partisan. You always attack the right and defend the left. Or go with the occasional ‘both sides!’ Crap.

      2. Yes. Organized crime pays well, especially those union bureaucrats!

    2. I’m all for tax cuts in blue states. CA and NY can lower their income tax rates whenever they want, and then fewer of their residents will be hamstrung by the caps

      1. As a general rule, I too favor lower taxes over higher taxes.

        I just have to laugh at the morons around here who are attempting to justify keeping taxes high from a libertarian perspective.

        1. Who exactly is “justifying keeping taxes high” here? Quote them.

          Nobody has said that high tax states should remain so. Some here have even urged them to lower their taxes.

          You, as always, are a strawman spewing liar.

          1. Everyone who wants to keep the SALT deduction repealed, in order to “stick it” to blue states.

            1. Actually, we just don’t want to have to pay the bills for your various excesses.

            2. No, we want those states to minimize their taxes and not demand states like mine to subsidize.

    3. Alright, let’s hear it. Give me The Libertarian Case For Disproportionately Higher Taxes On People In Politically Disfavored Geographic Locations.

      1. Places like CA, HI, NJ, OR, MN, NY, VT are indeed all high tax shitholes. Nothing much libertarian about them at all.

        But explain what you mean by disproportionate?

        Are you really trying to argue that it is the job of the Federal government to relieve the residents of those states from the tax burden they have imposed upon themselves?

    4. Tax cuts and deductions are not the same thing. Tax cuts in general are good. Deductions depend on what they are for and if their purpose is to reflect reality or if they are meant to try and force people to behave certain ways by penalizing anyone who doesn’t with higher taxes.

      You understand this concept, and your word games don’t reflect well on you.

  17. Yay! Libertarians for Higher Taxes (But Just On Residents In Blue States)!

    1. Stupid strawman even for you.

      If the residents of those states do not want to pay those taxes they can vote to lower them, or they can move.

      It’s not my job, nor is it the Federal government’s job to shield them from their own choices.

      1. And there we go. It’s okay for the federal government to charge more taxes on people living in high-tax states because they made the “wrong choice” on local taxation issues. So sayeth Thomas.

        1. Wrong.

          The Federal government does not “charge more taxes” you hopeless idiot. Federal taxes rates apply equally – and everyone has the same deduction limits.

          1. Before the SALT deduction was repealed, some individuals got to keep more of what they earned, and didn’t have to pay as much in federal income taxes. Now, with the deduction gone, they have to pay more in taxes. Some people LIKE that state of affairs and are totally happy with more people paying more in taxes, out of “fairness”. And they also claim to be libertarians, which is the hilarious part.

            1. Before you idiots voted for more spending in your states, you got to keep more of what you earned.

              Now you want the SANE people to pay for your stupidity.

              1. Once again: no one paid more in taxes directly because a taxpayer claimed a SALT deduction.

              2. But, this type of zero-sum thinking is exactly how left-wingers tend to think about taxes. That if someone gets a tax cut, that it is “unfair” and the tax burden is then “shifted” onto someone else. No, actually: if someone gets a tax cut, no one else pays more in taxes as a result.

                1. That might be true if spending was cut when the tax revenues ran short. But Democrats and RINOs never cut spending, so someone else’s taxes have to be raised.

                  And if they borrowed that money instead of raising taxes, they actually shifted the burden to our children and grandchildren.

                  1. “That might be true if spending was cut when the tax revenues ran short.”
                    ^this

            2. Because the people who live in high tax states voted for the high taxes. The Federal Government has nothing to do with it, stupid.

            3. Maybe the state should allow you to deduct federal income taxes instead.

        2. It’s okay for the federal government to charge more taxes on people living in high-tax states

          This is of course stupidly wrong. What we want is for the Feds to stop charging more to residents of low tax states. It’s revealing left wingers reach erroneous conclusions just about every time they think because owning the cons is more important to them than understanding reality.

          1. What we want is for the Feds to stop charging more to residents of low tax states.

            They’re not. No one in a low-tax state had their tax rate go up when an individual in a high-tax state claimed a SALT deduction.

            1. Just a quick proof of CJ lying:

              My comment: What we want is for the Feds to stop charging more to residents of low tax states.

              His response: They’re not. No one in a low-tax state had their tax rate go up when an individual in a high-tax state claimed a SALT deduction.

              Note how I didn’t say their tax rate “went up”, I said they were charged more than those in high tax states. He changed it because he understood I was 100% correct but being the douchebag he is he couldn’t just let it go. He had to lie about it.

              This is who he is.

              1. If no taxpayer’s tax rate went up when someone took a SALT deduction, how could any taxpayer wind up paying more taxes, or being “charged more”, as a result? Please, explain how this works.

                This is you being a troll: you have lost the argument and so you are going to try to manufacture doubt about an insignificant difference.

              2. I said they were charged more than those in high tax states.

                This is what I said, which is obviously true except among idiots and people intentionally pretending to not understand.

                If no taxpayer’s tax rate went up when someone took a SALT deduction, how could any taxpayer wind up paying more taxes, or being “charged more”, as a result?

                Taxes are determined by applying a rate to the taxable income. Thus taxes are reduced when the taxable income number is reduced even though the rate remains the same.

                This isn’t controversial except among idiots and people intentionally pretending to not understand.

    2. We don’t activate forcing other people to subsidize high taxes in other states.

      If New Yorkers SUPPORT high state taxes, that is on them.

  18. The SaLT does more than to give relief to the rich and make tax payers with lower taxable income to pay more it also allows the high tax states such as California and NY and other to shift a part of their state tax burden from their own residents to residents of all the states that have lower tax rates that they do. By the tax payers in these high tax being able to deduct their state and local taxes from the federal taxable income which lower the income form these state and forces the federal tax rate to be increased to make up the lost revenue. This puts an increased federal tax burden on these states to make up the lost revenue because of this SaLT deduction to meet the budget of the federal government. This in effect these lower tax states now has to pay more in federal taxes because these high tax states gets a larger SaLT deduction and the federal government has to have a higher tax rate to finance the budget.

    1. By the tax payers in these high tax being able to deduct their state and local taxes from the federal taxable income which lower the income form these state and forces the federal tax rate to be increased to make up the lost revenue.

      That is not how it works. No one else’s tax rate went up as a result of some people claiming the SALT deduction.

      “Oh, but the government still has to pay for all that spending, and that tax burden is shifted to everyone else!” That is because of the SPENDING, not because of the tax rate.

      You’re basically making the left-wing argument that when people in high-tax states claim the SALT deduction, they aren’t paying their “fair share” in taxes. LOL

      1. “You’re basically making the left-wing argument…”

        No, only a person a dense as you would see it that way. It is you who are making the left wing argument that residents of high tax states should get special relief from the Federal government.

        1. Special relief from the federal government that they, blue states, vote to expand with taxes, printing and spending.

        2. There you go. When some people got to keep more of what they earned, it was “unfair” and “special treatment”.

          When high-income earners don’t have to pay SS taxes on their marginal income beyond the SS cap, are they getting “special treatment”? Should the cap be repealed?

          When charitable donors get to deduct a portion of their contributions on their federal income taxes, are they getting “special treatment”? Should the charity deduction be repealed?

          I thought the libertarian argument was that taxes should be lowered, not raised out of “fairness”.

          1. The libertarian argument is indeed taxes should be lowered.

            The libertarian argument is not “give some people some Federal relief from their self imposed State tax burden.”

            That’s so moronic even you should be able to understand the problem.

            1. That you doggedly refuse to see it is not a failure of libertarianism, it is your entire lack of libertarianism.

              Expecting people who choose to live in high tax locales to accept the consequences of their own actions is supremely libertarian.

              1. You insisting that Uncle Sugar should bail them out, however, is not.

            2. No no, answer my question. Should the SS cap be abolished? After all, those high-income earners shouldn’t get “special treatment”, should they?

              I can easily see a principled argument in favor of eliminating all deductions. If that is your position though, I expect you to make it forthrightly and honestly. Not to use neutral-sounding rationalizations for a partisan motivation.

              I understand that certain military pay is also exempt from taxation. That also seems like “special treatment”. Should that exemption be repealed?

              1. Now you’re getting somewhere Jeff. You know that the libertarian answer to this is to abolish social security and move to a 401k-type index fund model. But I’ll play on this:

                The Feds AND states tax high earners on SS payouts (while the feds force individuals into a scheme that is unable to beat inflation). This would be the equivalent of eliminating the SALT cap then the feds and states turn around and tax the “savings” on high earners on the backside.

                But sure, if so many morons think SS is a great idea, eliminate the cap. The sooner the political landscape changes on this scheme, the better.

                1. There is something to making EVERYONE move to a 401K especially government unions and other leeches on the state as they would finally have some skin in the game for the country/economy doing well. Also the market scammers should be reigned in on how they control trades to benefit themselves at our expense as proven by GAMESTOP.

      2. This is penaltax tier logic.

  19. The benefit of the SALT deduction has never been a secret. When Oregon promoted a tax increase the chairman of the revenue committee pointed out the cost of the increase was offset by the decrease in federal taxes.
    To avoid this conflict, eliminate the federal income tax and assess the federal budget to the states based on their electoral college representation. Sort of the old representation/taxation principle in the founding of the country.

    1. What happens when a State fails to remit the “proper” amount?

      We’ve been down this road before. I’m not sure what the solutions is, but repeating the past is not going to turn out better a second time.

  20. What no “MARKET CRASH!” article today from this moron?

    1. “MARKETS IMPLODING” is only a problem when OrangeManBad could be blamed.

      1. Oh, and in case anyone hasn’t noticed.

        May 12, 2021

        MARKETS IMPLODING

  21. Imagine being a “libertarian” and being against tax cuts. Boehm, please

    1. Look, Boehm is an idiot. But do not think for one second that he came up with the concept for this article. No, the entire pretense of what it presents was assigned to him from higher up the editorial food chain.

      Because what is the common refrain from the writers around here? Aren’t they always bitching about how the Republicans never want to “pay for” the tax cuts they espouse? Except in this case reducing the SALT deduction actually was one of the ways they tried to pay for the tax cuts they passed.

      Well now, along comes Schumer and the rest of the Democrats seeking to do exactly what Reason criticizes Republicans about. But REason certainly isn’t going to directyl lay into them for doing exactly what they have always promised to do.

      No, and there is no real way to both sides this, unless you visit it prom the POV of a committed socialist, that is…

  22. Communists-lite want to eat the rich but while it sounds tasty it will only feed the pig that is our government for about 4-7 days if you confiscated EVERY penny they owned. Now then, piggy must be fed, who’s next? Well that would be the middle class, that wouldn’t feed piggy for very long and then piggy would have to eat the poor but they don’t have anything so you’d have an entire country of dependent morons who look to the government for their every need which would make the oligarchs very happy because…they are the ones getting those tax laws you squeal about written. Fairness is a flat tax or consumption tax where everyone is treated equal and monopolies on services is not allowed. Also kids, in your zeal to tax business, ANY business, that is a cost of doing business and it gets passed on down hill to the idiots screaming to tax everyone else but them.
    Biden is just what America deserves, only he can make the blind see, the stupid think. He will bring you that overdue lesson in reality but by the time you figure it out…well just dig that hole and pull the grass over and save them the time.

  23. Hey kids, if you don’t like the tax laws you need to talk to the rich folk who write them. Contact UNIPARTY@DCGOV.COM Nancy is getting some Haagen Dazs from her Sub Zero fridge so you may have to wait for a reply.

  24. While I love the idea of bashing Democrats for their “tax the rich but not my rich”, I have never liked being taxed on taxes. Many taxes are withheld and you never see it as income.
    If the feds take 50% and state/county/city take 50%, you have zero.

  25. The deduction should be repealed completely and corporate taxes reduced in kind. Why are we rewarding people for buying expensive houses? Encourage people to live within their means and to invest.

    1. “Why are we rewarding people for buying expensive houses? Encourage people to live within their means and to invest.”

      You do realize that by uttering those two sentences you are only arguing with yourself about the particulars of the same underlying principle, right? After all, given what housing values have historically done, aren’t they a type of investment? Maybe not the best, but even if not, is it your intent to restrict people to only certain investments that you deem proper?

      You were better off sticking to your first sentence and leaving it at that. The tax code exists to fund government. The idea that it should accomplish anything else is highly problematic.

      Reducing the SALT deduction is a first and necessary step towards any hope of eliminating it. And no, that is not advocating increased taxes, do not forget that what Trump did was part of a net reduction in taxes.

      But an outright elimination of the deduction, even with offsetting reduction in tax rates would risk destroying a tremendous amount of wealth in a very short time. Any elimination should be done in a phased manner, if only to allow time for markets to adjust in a less destructive manner.

  26. “…the SALT cap creates a serious optics problem for Democrats.”

    Only if the media reports on it.

  27. So Demicraps are having problems satisfying their own super-wealthy donors…

    Makes me laugh with glee!

    Sanjosemike (no longer in CA)

  28. allowing property tax deductions for high tax states allows those state to boo-foo their residents while we subsidize it. the real story here is a place that taxes the folks at that prison sex rate and that the lumps take it. i’ll say it “you dopes are being hosed. don’t expect me to help you pay your taxes”. fucking morons

  29. SALT issue is the same rigged political game. Both fed and state govt want their money and will spend it no matter what. Everyone has an incentive to take advantage of the union and make someone else shoulder the burden.

    Good on Trump for taking the fight back to them since they weaponized taxation and budgeting in the first place, but caps are a stopgap. SALT needs to go entirely and states need to have a feedback mechanism for their tax and spend policies.

  30. Agreed.

    We should also get rid of the mortgage tax deduction and $500,000 home sales tax exclusion.

  31. Paying a tax based on money you never received is tyranny

Please to post comments

Comments are closed.