Why Do Some Democrats Want to Give the Wealthy a Tax Break?
Eliminating the cap on state and local tax deductions wouldn’t help the middle class.
Not all deductions are created equal.
Photographer: Daniel Acker/Bloomberg
Northeastern Democrats are pushing President Joe Biden to repeal the cap on state and local tax deductions as a part of his administration’s American Families Act. That’s exactly the wrong approach. If they really want to help their middle- and lower-income constituents, they should eliminate the deduction entirely — and use the proceeds to fund a robust child allowance.
Expanding the SALT deduction is not the most obvious issue for Democrats. Although the deduction clearly benefits metropolitan areas on the coasts that reliably vote Democratic, the majority of its gains go to the most affluent households. It also adds to a distortion in the tax system that pits poor municipalities against rich ones.