The second-biggest program in the Democrats' spending plan gives billions to the rich
The House is expected to vote this week on President Joe Biden's Build Back Better legislation. The social spending bill includes investments in clean energy and affordable child care - but it also includes a $285 billion tax cut that would almost exclusively benefit high-income households over the next five years.
The measure would allow households to increase their deduction from state and local taxes from $10,000 to $80,000 through 2026, and then impose a new deduction cap through 2031. It's the second-most expensive item in the legislation over the next five years, more costly than establishing a paid family and medical leave program, and nearly twice as expensive as funding home-medical services for the elderly and disabled, according to an analysis by the Committee for a Responsible Federal Budget.
The tax cut would partially reverse a tax hike from President Donald Trump's signature 2017 tax bill that was particularly burdensome to high-income, high-tax states. Before 2017, taxpayers could deduct virtually everything they paid in state and local taxes from their federal taxes, reducing the amount of income that the federal government could tax. The 2017 tax bill limited that deduction to $10,000 per year, creating what is known as the SALT cap...