Among the tax reforms in the current plan before Congress is the elimination of the state and local tax payments as deductions from individuals’ Federal income tax returns. Who actually benefits from these deductions, though? Taxpayers in New York, California, and a couple of others. States dominated, for the most part, by the Progressive-Democratic Party. There’s an ox being gored.
Who else benefits from these deductions?
…88% of the benefits in 2014 flowed to taxpayers who earn more than $100,000, while 1% went to those who earn less than $50,000….
That’s not quite the Progressive-Democrats’ hated 1%, but they’re included—and the poor, whom the Progressive-Democrats pretend to want to help, get almost nothing for the deduction: they don’t have enough income to be able to use it—even if they live in those Blue States whose governments so loudly pretend to be on their side.
The Progressive-Democrats aren’t even consistent in their opprobrium.
The deduction is worth about $100 billion a year—the sixth largest individual income tax break. The Tax Foundation estimates that eliminating the write-off would raise $1.8 trillion in revenue over a decade.
Not even the prospect of all this money for Federal coffers—$180 billion per year to offset those $100 billion of deductions—is enough to draw the Progressive-Democrats in.
Heaven forfend that they take an alternative course. They could jump on that large increase in the Federal take with both feet, and in parallel (especially since the deduction goes away) those Blue State governments could lower their own tax bites….