(PatriotHeadline.Com)- Congress is already starting to craft its next coronavirus relief bill even though they just passed three recently, including an economic stimulus package that totaled $2 trillion.
But Speaker of the House Nancy Pelosi is drawing the ire of other members of Congress for her push to repeal the SALT deduction cap.
As part of President Donald Trump’s tax reform bill that was implemented back in 2018, a $10,000 limit was placed on deductions of property taxes or state and local taxes from federal tax returns. That deduction benefits those who make a lot of money and also live in states with high property taxes.
Pelosi’s argument for “retroactively” repealing the SALT cap is that it would inject cash into those households in America that are currently struggling because of the lagging economy due to the coronavirus pandemic. As she told the New York Times recently:
We could reverse that for 2018 and 2019 so that people could refile their taxes. They’d have more disposable income, which is the lifeblood of our economy, a consumer economy that we are.”
Her thinking isn’t very solid on this, though. Senator Chuck Grassley, the chair of the Senate Finance Committee, quickly dismissed Pelosi’s statement, saying that eliminating the SALT cap wouldn’t do what she thinks it would. Instead, it would only give tax breaks to wealthy Americans.
A spokesperson for Grassley, a Republican from Iowa, said:
“This is a nonstarter. Millionaires don’t need a new tax break as the federal government spends trillions of dollars to fight a pandemic.”
Republican Senator Patrick Toomey from Pennsylvania agreed, and even went as far as suggesting a coronavirus relief package shouldn’t be an avenue for passing through political aims. He said:
“If we determine that another measure [relief package] is necessary, it should not be the vehicle for Speaker Pelosi’s partisan, parochial wish list.”
It’s seems as though Pelosi didn’t do her research when she made her suggestion and then backed it up by saying everyday Americans would benefit.
As the congressional Joint Committee on Taxation has found, if the SALT deduction cap were repealed for only 2019, it would result in addition revenues at the federal level of $77 billion. Of that total, roughly $40 billion would be sent to Americans who earn more than $1 million per year. The remainder of it would go to households that have an annual income of at least $200,000.
These are facts that Pelosi either failed to research or failed to pay attention to when she made her suggestion. It seems odd, too, because the latest coronavirus relief package put in place income caps for the direct relief payments.
Individuals who earn $75,000 or less will receive a $1,200 economic stimulus check. The cap for married couples is $150,000 in income for $2,400 total in checks. An additional $500 is given for each dependent child.
But those economic stimulus checks go down by $5 for each $100 above that amount earned, with no money given to individuals who earn more than $99,000 or joint filers who have no children and earn more than $198,000.
That is how you design an economic stimulus package to help those who need it, and not the wealthy Americans.