Brian Brenberg on impact of stimulus, raising taxes
The King’s College in Manhattan Business Professor Brian Brenberg on calls for another stimulus check and potential plans to raise taxes.
The Democrat-backed $3.5 trillion budget resolution Wednesday morning paves the way for potentially altering the cap on state and local tax, or SALT, deductions.
A provision in the budget resolution would allow the Senate Finance Committee to reduce, or perhaps eliminate, the $10,000 cap.
During a "vote-a-rama" that began on Tuesday and lasted until Wednesday morning, Iowa Republican Sen. Chuck Grassley proposed an amendment that would have prevented Democrats from changing the $10,000 cap, implemented as part of 2017 Tax Cuts and Jobs Act. His amendment was blocked.
AS DEMS PUSH SALT CAP REPEAL, MANY STATES HAVE OK’D WORKAROUND
Grassley pointed to inclusion of the SALT adjustment provision as a tax break for the wealthy, when the party has said it intends to raise tax rates for those same people.
The push to repeal the cap has the support of Sen. Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., who live in high-tax states where residents would benefit from terminating the cap.
The $10,000 cap is scheduled to expire after 2025.
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Like Grassley, other Republicans have characterized the effort to repeal the cap as a tax cut for the wealthy. An analysis conducted by the Tax Foundation estimates its repeal would cost $600 billion in revenue over the course of a decade, with the largest relief aimed at the top 1% of earners.
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The vote on the budget resolution came out to 50-49, passing along party lines. It will now be sent to the House for approval. Its passage would allow Democrats to move forward with President Biden’s spending plans via the fast-track process known as budget reconciliation, which would allow them to bypass the threat of a Republican filibuster and approve the legislation without any support from Republicans so long as each Democrat is on board.
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