Daily Archives: 14 January 2025

SALT Tax

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Short, brief, sweet, and redundant.

One thing threatening serious tax reform—which is to say making permanent the tax rate reductions that otherwise expire near the end of this year, reducing those rates further, and flattening the rates further—is the kerfuffle over the SALT (State And Local Tax) tax deduction cap, currently at $10,000.

I sympathize with the Representatives and Senators, especially the Republican ones, in those States most impacted by the cap. Their wealthier constituents want the cap raised significantly if not eliminated. These politicians, though, must understand that as members of our national Congress, their responsibilities to our nation as a whole runs a very close second to their responsibilities to those individual constituencies.

The business of cap raising/eliminating is nonsense for a couple of reasons. One is that there is no reason at all for the rest of us taxpayers to subsidize those in States with profligate spending and already high taxes. Those Congressmen would do better using their Federal influence and bully pulpit to convince their State and local governments to mend their spendthrift ways and lower their tax rates—the latter which several States (tellingly, mostly Republican led) already have done or are doing.

The other reason is that, aside from empirical evidence that lowering tax rates actually increases revenues to the Federal government from the increased private economic activity that results from more money being left in the hands of us private citizens, revenue reductions—if any—from lowered tax rates is easily covered by reduced spending in general and reduced, if not eliminated, subsidies and tax credits for “green” energy solar and windmill farms, battery cars, federal deductions for non-federal tax collections, and other such tax engineering froo-froo.

Indeed, with sufficiently reduced spending, badly needed increased spending on national defense still could occur.

Raising the SALT tax cap wouldn’t be tax reform, it would be tax deform. In fact, reform here would be eliminating the SALT deduction altogether.

End Congressional Oversight of the District of Columbia?

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Washington, DC, delegate Eleanor Holmes Norton (D) wants an end to Congressional oversight of the District of Columbia, and she’s moving to revive earlier legislation that would to do so.

The congressional review period for DC bills is onerous for the District, and rarely even used by Congress, causing DC bills to be unnecessarily ensnared in congressional bureaucracy for months[.]

It’s already the case, though, that the oversight is so rarely used—only twice in the last 30 years has Congress moved to overrule a DC-passed ordinance—that the district already is, functionally, self-ruling.

However.

The move, even were it a good idea, would require an Amendment to our Constitution. Here’s Art I, Sect 8 on governance of the District of Columbia:

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings

Holmes has a beef, in that there are too many bureaucrats involved, and it is much to slow to get anything done. Those 60 days to review an ordinance proposal are patently excessive, especially in this day of computers and Congressional staffs so bloated that staffers are scratching for things to do. I’ll go out on a limb: it shouldn’t take more than a week (Sundays excepted) to do the review and either approve or reject the ordinance.

Those interferences, those delays, badly want reduction.