Fight to the finish line
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A former economic adviser to President Obama ripped House Democrats’ plan to give a tax cut to millionaires, especially those in high-tax blue states, calling the proposal “obscene.”
Jason Furman, president of the Council of Economic Advisers (CEA) under former President Obama, lambasted the Democrats’ plan to repeal a cap on state and local tax (SALT) deductions, pointing out that multimillionaires would benefit the most from lifting the SALT cap.
The Trump-era Tax Cuts and Jobs Act capped the SALT deduction at $10,000, but House Democrats are pushing to lift the cap for five years, which would overwhelmingly benefit wealthy individuals in states with high income tax rates.
Rep. Josh Gottenheimer, D-N.J., in a Tuesday tweet vowed that the SALT “deduction will be in the final legislative package” for Democrats’ social spending bill.
“We are going to get this done,” he wrote.
“My guess is the majority of Americans have 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 Tuesday.
“The bill would do more for the super-rich than it does for climate change, childcare or preschool,” Furman continued. “That’s obscene.”
Furman also indicated that some “billionaires would get a net tax cut from Build Back Better [and] SALT repeal” and that he hasn’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.”
“If your wealth is $200m then your income is likely to be below about $10m,” the former CEA president. “Under the SALT provision [and] the rest of the bill households making up to about $40m annually will get a net tax cut.”
The Committee for a Responsible Federal Budget (CRFB), a nonpartisan nonprofit “committed to educating the public on issues with significant fiscal policy impact,” wrote about the conundrum facing Democrats on a policy that would lower taxes on the rich instead of raising them.
The CRFB’s analysis noted that “a two-year SALT cap repeal — if included — would reduce taxes on the top 5 percent of earners by over $70 billion in FY 2023.”
“The result would be a $30 billion net direct tax cut for those in the top 5 percent when SALT cap repeal is in effect. Those in the top 1 percent would also face a net tax cut, though we have not estimated the magnitude,” the analysis noted.
Houston Keene is a reporter for Fox News Digital. You can find him on Twitter at @HoustonKeene.
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