Pelosi Makes Tax Break For Millionaires A Priority In Fourth Stimulus Package

While House Speaker Nancy Pelosi talks endlessly about helping working Americans, she’s quietly making an effort to get millions of dollars for millionaires. 

Pelosi is proposing a rollback cap on state and local tax (SALT) deductions as part of the next coronavirus stimulus bill.

“A 2019 report from the Joint Committee on Taxation projected that of those who would face lower tax liability from elimination of the cap – which only affects those who itemize tax deductions – 94 percent earn at least $100,000,” Fox News reports. “The government would lose out on $77.4 billion in tax dollars, with more than half of that amount being saved by taxpayers earning $1 million or more.”

The SALT cap, established by President Trump in 2017 as part of his tax reform law, sets the limit for deductions of state and local tax from federal taxes at $10,000. Many residents of states that routinely vote for Democrats dislike the limit.

Pelosi says the move — which would include making it retroactive for the tax years of 2018 and 2019 — would give Americans “more disposable income, which is the lifeblood of our economy, a consumer economy that we are.”

But Senate Finance Committee Chairman Chuck Grassley (R-IA) said it’s a terrible idea.

“This is a nonstarter. Millionaires don’t need a new tax break as the federal government spends trillions of dollars to fight a pandemic,” a spokesperson for Grassley told Fox.

New York, New Jersey, Maryland and Connecticut even sued to repeal the SALT cap, claiming that it unfairly hit blue states. That lawsuit was dismissed by a federal judge, and the states are appealing.

Many wealthy residents have been moving out of those states and fleeing to states like Florida, which has no state income tax. Florida received more new residents than any other state last year, while New York’s outflows to the Sunshine State were the highest – 63,772 people. New York had the third-largest outflows of any state, with 452,580 people moving out within the past year.

Treasury Secretary Steve Mnuchin has suggested that if the states want to prevent this from happening, they should lower their taxes.