Regular tax paying Americans may not have noticed the socialist left slinking around to get a massive tax cut for the rich during negotiations over the Biden “Build Back Bankrupt” reconciliation package. The socialist left, of course, never tires of falsely accusing Republicans and conservatists of trying to favor the rich. In fact, the super wealthy overwhelmingly favor liberal democrats, whether you are talking about Silicon Valley personalities, such as Mark Zuckerberg, or Wall Street. Most of these people vote Democrat. During recent negotiations surrounding the almost completely useless Biden “Build Back Bankrupt” plan, alleged socialist “populists” – while jabbering insincerely about helping the average person – tried to sneak in a massive tax cut that only benefits extremely wealthy people in highly taxed blue states. Let me explain.
The US tax code has an exemption allowing people to deduct from their federal income taxes some portion of their state and local taxes they owe, including property taxes. This has long created a windfall for rich liberals in high taxed blue states. Instead of containing state and local spending to some reasonable degree, by focusing on issues truly relevant to tax paying Americans (as opposed to welfare payments to illegal immigrants), blue states have continued to raise taxes higher and higher to ridiculous extents, just like the federal government. But rich democrats could avoid significant amounts of their state and local taxes by making a massive deduction for such state and local taxes, sometimes called SALT taxes, on their federal income tax filings. Thus, if their state and local taxes were going up significantly, rich liberals could buy big expensive homes in New York, New Jersey, and California, and then write off the costs of those expensive homes through their federal SALT deduction. In other words, they would offset their high local taxes, which they probably stupidly voted for, by reducing their federal income taxes correspondingly. To the extent the federal government collected too little revenue from these millionaires and billionaires, the federal government could raise taxes on everyone else, so that taxpayers in Idaho and Louisiana, and other less wealthy places could indirectly make up for the taxes the rich liberals were ducking.
This arrangement offended former President Trump, because of the persistent liberal abuse of this one deduction. So, in the Trump’s 2017 Tax and Jobs Act, Trump limited the amount of the SALT deduction to $10,000 – capping the amount of federal income tax rich liberals could evade.
During recent inside negotiations over the Build Back Bankrupt” irresponsible reconciliation package, a small group of liberals crept around the negotiations and tried to sneak an elimination of the cap on the SALT deduction into the bill. Again, the sole objective in removing the cap on the SALT deduction is to save rich liberals in blue states more tax money. This move by the Looney Left therefore exactly and precisely fits the critique that leftists constantly level as tax cuts: namely that the tax cuts only benefit the rich.
When liberals normally make that accusation, it is not true. For example, recent economic data now show that Trump’s tax cuts actually paid for themselves based on economic forces that liberals do not even try to understand. Specifically when Trump cut taxes on individuals and businesses those individuals and businesses went out with their extra money in the private sector and invested in more business activities. Small businesses expanded to new locations, franchise owners bought additional franchises, large businesses invested in additional product lines and services. These business expansions in turn, allowed the businesses to hire more and more people, which is why the Trump economy both grew rapidly (much faster than Obama’s economy) and made historic gains in worker wages and achieved all time low unemployment rates. The effect of all this furious activity in the private sector increased revenues to the federal government, because their were so many more businesses and employees paying taxes. This is exactly the magic wand that economic illiterates like Obama, Biden, and Hillary Clinton can never seem to find when they are in charge. But go look at the actual numbers, they are available. The US economy boomed under Trump generating more money for the federal government, which in turn paid for Trump’s tax cuts fully by the current point in time.
The same is not true for socialist efforts to sneak an elimination of the SALT deduction cap in the Reconciliation Bill. That is purely a gift to rich liberal democratic donors. It does not make us more competitive in our corporate tax rate. It does not help the middle class or minorities in any way. It simply allows liberal democrats to get richer. Rarely are the insincerity and hypocrisy of the left so clearly highlighted. Here at last we have a tax deduction that every normal American should hate. It is worth remembering that this tax deduction for the rich is being snuck into the Reconciliation Bill by socialists who constantly claim that “the rich need to pay their fair share” and that the socialists are working towards a more equal distribution of wealth in society. This is hypocrisy on stilts.
Predictably, the main street media has not covered this. Indeed, Stuart Varney, looked visibly uncomfortable talking about the topic this morning on his show. Of course, he is a rich man with a big expensive house in New Jersey. As always, there will be a group of equally corrupt, self-interested Republicans who join the far left in its orgy of Kleptocratic corruption. But don’t worry Mr. Varney. “You’re alright and that’s a fact. And you’ll be back on the show soon if you are not careful” — to use some of Mr. Varney’s daily cliches.
By Paul H. Beattie
Notes from the Secular Right 