KevinC
5200
How do you figure? It’s being in a narrow majority that gives them the power/attention.
I think they prefer a country where the wealthy keep bribing them, however that happens, without much care either way.
KevinC
5202
I could believe that. I don’t think they particularly care what happens to the Democratic party (or the country, for that matter) as long as they can benefit from it.
Alstein
5203
It’s a lot easier to vote no than to vote yes. If Sinema was in a 49-Dem Senate, she would not be anywhere near as hated.
I don’t know New York, or Chicago style or is that is disgusted stuffed crust variety?
Timex
5205
Yes, although I think this is largely just a mistake that Pelosi made, in an off the cuff statement to the press… She made this statement before either bill actually even existed. This was back when they were still negotiating the BIP.
Also, of the democrats had shit up about trying to tie it to the reconcilation bill, they likely would have gotten at least some support from GOP members in the house, which would have negated all this drama, and it would be done.
Saying, “don’t worry that this bill doesn’t have all that stuff, we’re just going to pass another huge bill without the GOP, fuck those guys!” in public, was stupid.
This is a bit surprising.
It’s all just posturing till all 50 Dem Senators vote yes on a Reconciliation bill. She was also for the wealth tax, then Manchin nixed it. Manchin proposes something then she nixes it. Fuck them both.
wahoo
5208
Tax twitter going nuts over huge tax cut to multi-millionaires. Could be one of biggest parts of BBB b/c it’s retroactive.
Per Jason Furman more for super rich (50 to 200 million) than for climate change.
The distribution table from JTC is going to be fun.
Timex
5209
What part of the BBB is the big tax cut to millionaires?
Alstein
5210
The House progressives could torpedo this over the tax cuts. Esp after all the cuts they got.
Kyrios
5211
I know I saw some random tweets earlier about SALT deductions in whatever version of the bill everyone is crawling through. Weird place of (1) blue states want it since they tend to have more state and local taxes, but (2) almost all of the benefits accrue to people who have either high incomes, high value houses, or both, since anyone who doesn’t is just taking the standard deduction (which is even more true with the new/higher standard deduction).
The Salt deduction changes murdered a lot of people in my state. It was really a dig at blue states when Trump did that with his cuts so I really don’t have an issue with it. I know my brother who certainly isn’t Bill Gates had his taxes go up by thousands because of it. For example my father pays around 18k a year in property taxes. I believe my brother is in the same range. NJ is broken…
Yep, losing that deduction hurt in California. State taxes are quite high and not being able to deduct them jacked up the taxes of a lot of people way outside of the $50M club.
Kyrios
5214
On the Trump tax cuts and removing the SALT deduction: studies consistently showed at the time that virtually everyone in a high SALT state (hi from MA!) felt they were getting screwed and/or paying more, but that was rarely the case. What was usually happening is that the rest of the changes roughly offset losing SALT and they [we] paid about the same, while filers with similar situations in non-SALT states got a substantial cut. Which feels just as shitty (actually kind of shittier) but is not entirely the same as taxes going way up. There were some people who paid more, but not nearly as many people who thought they paid more. (This is probably the best article on this, despite my dislike of the NYT; Casselman and Tankersley are both good economics/data reporters.)
To the present day! As I had mentioned, I had seen a few tweets in my feed today about this, mostly drowned out by various election noises. However you feel about the changes that happened in the 2017 Trump tax changes, that’s now built in as the baseline: any changes to it are effectively spending, in terms of balancing the current bill to make the crowd that cares about that happy.
The bill as written would suspend the $10,000 SALT cap from 2021 (where the “retroactive” description comes in) through 2025, reinstating it from 2026 through 2030. The only scoring I can find in a quick Google comes from the Committee for a Responsible Federal Budget, which is exactly the kind of center-right think tank you’d guess from the name: not one of the big AEI funded Trumpy groups, but they have a position and it usually involves austerity. They have it as costing $475M in revenue over the five years in which it would be suspended. Other research (from both left and right think tanks, mostly done to estimate the impact after the Trump cuts) generally ends up with over 50% of any SALT repeal going to the top 1% of income households, over 80% going to the top 5%, and virtually none of it going to the bottom 80%.
This intuitively makes sense: the standard deduction has almost doubled and you have to have $24K in deductions before you benefit a single cent. There are some random one-offs, but generally even in NJ and CA (selected as the highest property and income tax states, not because they were just mentioned!) you are talking six figure HHI and mid to high six figure home value (especially the latter because of how it interacts with the mortgage deduction) to get any benefits vs. the standard deduction.
I dunno. I would save some money from this, but we should not be writing tax policy such that people in my position are paying less. I get why all the Dems from the northeast and CA are in favor, but getting rid of the portion of SALT that was a massive subsidy to homeownership was (maybe literally!) the best thing to come out of Trump’s presidency.
Excellent post.
As I’ve said if we want to reduce inequality we should stop giving tax deductions and subsidies to those making above-average incomes. Ideally, that means anyone in the top 40% (85K)
and certainly in the top 20% (140K) with some allowances for children and perhaps for living in HCOL areas.
I understand Biden politics for making the cut-off at the 400K, but if we really want to fund all these nice social programs the cut-off should be a lot lower. If you all want to have a Scandanavian safety net, then we have to start taxing people like they do in those countries. The believe that we can have child care, elder care, parental leave, health care, free college, etc. by simply taxing millionaires and billionaires is a dangerous fantasy.
We could start by actually taxing multinational corporations rather than constantly shifting the burden to individual taxpayers. I agree with taxing high earners more, but our system taxes the hell out of wages and greatly favors investment income and corporations. We need significantly more balance before we start taxing wage earners at $85K.
We could eliminate the preference for capital gains, and tax inheritance the same way we do lottery winners. We wouldn’t have to try and pick some phase-out income. Both would hit high earners way more than folks wage earners making 85K
“Joe Manchin drives a Maserati” is the plot twist we need.
Enidigm
5219
I love their energy but they seem to think Manchin is on their team.
