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Wealth Advisor
Wealth Advisor

Champions of the Donor Class

A few GOP lawmakers are willing to sink tax reform to help their wealthiest constituents.

A few Republican members of the House are using bogus Democratic talking points to get tax breaks for rich liberals while discouraging blue states from enacting pro-growth reform. Now these rogue GOP lawmakers are even threatening to trigger nationwide tax hikes if they don’t get their way.

Tobias Burns reports for The Hill on a group of five Republicans who are demanding that the state and local tax (SALT) deduction be raised above its current cap of $10,000:

The lawmakers are saying they’re prepared to vote no as a group on the wide-ranging tax and spending cut package key to President Trump’s agenda if they don’t get the raise they want.

The group consists of Reps. Andrew Garbarino (N.Y.), Nick LaLota (N.Y.), Mike Lawler (N.Y.), Young Kim (Calif.) and Tom Kean Jr. (N.J.) — Republicans from wealthier suburban districts of major U.S. metropolitan areas, where higher property taxes make the increased cap especially valuable to taxpayers.

The federal SALT deduction is terrible policy because it takes the pressure off profligate state governments run by Democrats to restrain their own taxes. A proper cap would be set at zero, so that Americans nationwide would not have to subsidize the high-tax policies of New Jersey, New York and California. Without the ability to deduct heavy state and local taxes on federal returns, citizens of blue states would be fully accountable for their bad political choices and would be motivated to demand reform at the state level.

The 2017 Trump tax reform finally put a $10,000 cap on this insanity, a compromise intended to ensure the change in policy didn’t harm the middle class. Keep in mind that only about 10% of U.S. tax filers itemize anyway, so the current SALT policy already overwhelmingly benefits the affluent. But the rogue Republicans just can’t get enough of doling out favors to rich liberals.

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