December 7, 2021 - 9:01 pm
A Saturday Review-Journal letter to the editor argues that the cap on federal deductions for state and local taxes was a “weaponization of the tax code by the Republicans when they passed their massive tax break for the wealthy in 2017.” The argument is that the $10,000 cap should be raised to $80,000 because it “unfairly affects middle-class families in blue states.”
However, research demonstrates that an increase to the cap to $80,000 helps rich, coastal elites, not middle-class families. Research cited by The Economist this month shows that even the upper-middle-class, which includes the 60th to 80th income percentiles, would average only a $90 tax cut if the cap is raised to $80,000. Most of the benefit to this increased cap goes to the top 5 percent of earners.
In fact, most goes to the very rich. The research demonstrates that the top 1 percent of wage earners would receive an average tax cut of $15,000.
And I thought the Democrats were supposed to be the “tax the rich” to “help the poor” party. Sounds like our Democratic representatives from California and New York are just looking out for themselves and their rich benefactors.