Dan Walters: here’s the truth about Biden’s “infrastructure bill”

3 Oct

Sorry, the link loaded twice, but this is a good read. President Joe Biden wants us to believe his $3.5 TRILLION “infrastructure” package is about improving roads, utilities and quality of life for millions of people, but it’s really about undoing one of the good things Donald Trump did. In 2017, Trump got legislation passed that lowered taxes on working and middle income people while lowering deductions and therefore raised taxes on “the rich”.

As the nation’s most populous state, California obviously has a major stake in what the ultimate package will contain, if there is one. But the state has another, less obvious stake in how it’s financed because of something called SALT.

It stands for “state and local taxes” and four years ago, a Republican-controlled Congress and GOP President Donald Trump, as part of a major tax overhaul, imposed a $10,000 limit on how much SALT could be deducted on personal income tax forms.

In a tradeoff, the 2017 tax legislation doubled the standard deduction. The two actions had the effect of increasing federal taxes on high-income residents of high-tax states such as California while lowering the federal bite on low- and middle-income taxpayers.

The effect – “In California, that meant San Francisco and other Bay Area communities such as Marin, San Mateo and Santa Clara counties. In Santa Clara, for instance, the average tax return with itemized deductions reported outlays of $46,817.53 in state and local taxes, but could deduct just $8,931.28 due to the SALT limit.

As you’d expect, “Senate Majority Leader Charles Schumer of New York and House Speaker Nancy Pelosi of California have been trying ever since 2017 to undo the SALT limit, and California Gov. Gavin Newsom has publicly supported repeal. That’s why California has a big stake in how Biden’s “human infrastructure” package would be financed.

But how? Politically, it’s a tricky issue for Democrats, who want to change the limit without appearing to provide a windfall to the wealthy.

Putnam Wealth Management has published a monologue on the potential ways the SALT limit could be modified or repealed, one of which would place an income limit on restoring deductibility so that those with the highest incomes would not benefit. Other alternatives include doubling or tripling the limit or changing the Alternative Minimum Tax.

While singing “Eat the Rich,” they are actually planning to put the working and middle income population on the spit. Yet another reminder of The Road.

Yeah, Lemmy is God.

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