Here’s a thumbs-up to Rep. Alexandria Ocasio-Cortez for her vote against the Democratic establishment this week on the State and Local Tax deduction.
On Thursday, the House passed a bill (guaranteed to die in the Senate) that would raise and eventually eliminate the $10,000 cap on the SALT deduction in the federal income tax code. AOC was one of just 16 Democrats to stand with most Republicans on the issue — and the only Dem from a high-tax state to do so.
The SALT cap was a key part of President Trump’s 2017 reform, but that’s not why so many Dems hate it: Their problem is that the deduction shielded high earners from paying the full hit in high-tax states; the cap makes these fat cats more likely to move to low- or no-income-tax states such as Florida.
But, as AOC has the guts to acknowledge, that doesn’t make it any less of a gift to the rich: Without question, the SALT deduction overwhelmingly benefits high earners with expensive homes. More than nine in 10 households in the top 1% would profit from repeal; only 3% of middle-income households would.
Congress’ nonpartisan Joint Committee on Taxation reports that by 2021, half the benefit of a SALT repeal would go to those earning more than $1 million a year, with almost nothing going to those earning under $100,000.
Of the top 20 House districts that benefit from an unlimited SALT deduction, 19 are represented by Democrats. But AOC’s isn’t remotely one of them.
Kudos to Ocasio-Cortez for doing the math, and standing by her progressive principles — and her constituents.
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