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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBernie Sanders Splits With Nancy Pelosi, Chuck Schumer Over Tax Deduction in Dem States
Senator Bernie Sanders has split with Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer over their support for reinstating a tax deduction that some consider largely benefits rich people in Democratic states.
In an interview with Axios on HBO aired Sunday night, Sen. Sanders (I-VT) said bringing back the State and Local Tax (SALT) deduction would send a "terrible, terrible message," and urged Democrats to make it clear "which side" they were on.
He added that Democratic leadership could not be seen to be on the side of a tax break for high earners in high-tax states, such as New York and California, while claiming to fight for working Americans.
Asked for his position on the push to revive SALT, Sanders said: "It sends a terrible, terrible message. Ultimately, what you have got to doand in fairness to Schumer and Pelosi, it is hard when you have tiny marginsbut you have got to make it clear which side you are on.
https://www.msn.com/en-us/news/politics/bernie-sanders-splits-with-nancy-pelosi-chuck-schumer-over-tax-deduction-in-dem-states/ar-BB1gyQGl
Celerity
(43,408 posts)TreasonousBastard
(43,049 posts)zeusdogmom
(994 posts)PoliticAverse
(26,366 posts)TreasonousBastard
(43,049 posts)Everyone paying more than 10 grand in RE and school taxes, plus specific road taxes, garbage and leaf pickup fees, and the rest of the things towns and counties gouge us for is a gazillionaire?
I was making 35 grand a year and had an apartment in the city and a summer house on Long Island. Not rich at all, but in those years taxes and such were over a grand a year. If I owned the city apartment, or a house, it would have been a lot more. Nowadays, taxes are much higher.
Lots of people around either inherited property, or bought it long enough ago that it was cheap but the taxes keep rising, even if the income doesn't.
Maybe the fairest thing is to have several tiers in the tax deduction.
PoliticAverse
(26,366 posts)is really about lower income taxpayers, then limit the exclusion to lower income people.
MichMan
(11,933 posts)Johonny
(20,851 posts)If you bought a house in say California you almost certainly factored in SALT deductions in your purchase. The hatred of the cap gave us Orange county in 2018. It gave us other purple districts as well. Most people that paid the difference see them financing Trump's tax cut for the ultra rich on their backs. It raised taxes on GOP leaning voters. Ridding it and running on ridding it is a winning issue.
It is unlikely to hurt them to eliminate it. As low income people are unaffected and don't vote based on this issue. It's a purple district winner.
George II
(67,782 posts)PoliticAverse
(26,366 posts)property taxes.
https://taxfoundation.org/salt-deduction-benefit/
If you are really concerned with "middle class working people" then support capping the SALT deduction based on income.
George II
(67,782 posts)...who have high real estate taxes and moderate income taxes.
In Connecticut the average annual real estate tax is $6,400 (average home value of $300,000 X average property tax of 2.14%). A household with about $75,000 taxable income pays about $3,500 income tax. These two combined butts up against the $10,000 SALT cap.
They are most certainly NOT in the 1%, they middle class working people.
The SALT cap is regressive.
PoliticAverse
(26,366 posts)Your own example shows people owning a home and making $ 75,000 and not restricted by the cap.
George II
(67,782 posts)Half of the residents of Connecticut are NOT in the "1%", they're in the 50%.
uponit7771
(90,347 posts)PoliticAverse
(26,366 posts)prices in the states involved, making buying houses more affordable.
uponit7771
(90,347 posts)Hortensis
(58,785 posts)How things appear to those who can't and mostly won't understand really does matter. But how much that's needed, and how many people, do we sacrifice to image before we are betraying our duty? There has to be a balance.
Biden's trying hard to create belief that we can and will achieve our goals, without abandoning them.
As for what Sanders Sanders believes is important... Just for one reminder, in the summer of 2016 Sanders called on the Democratic Party to pause, just stop, our national campaigns against Trump and Pence while we focused internally to fix what he claimed were enormous existential problems with OUR party. Our own "corruption" was too great to ask Americans to vote for us until we'd fixed it.
We didn't, of course. We couldn't even if it had been real and not faux messaging. But 100 million Americans could refuse to vote that year and did.
Judgement. integrity. Commitment.
comradebillyboy
(10,154 posts)over Bernie's every time.
LizBeth
(9,952 posts)George II
(67,782 posts)comradebillyboy
(10,154 posts)and reality based. Not to mention vastly more competent.
Cha
(297,300 posts)Cha
(297,300 posts)I was thinking.. Phenomenal!
TheFarseer
(9,323 posts)You have to be rather well off for this to effect you.
MANative
(4,112 posts)Just try living in Fairfield County, CT and not having a $10k+ real estate tax bill. Personal experience. Slightly above Middle class.
betsuni
(25,537 posts)tax filers used the deduction before it was capped. Don't think these are all "wealthy and powerful" people. They're called Americans.
PoliticAverse
(26,366 posts)they were affected by the cap on the deduction.
And the median property tax bill in New Jersey was about $6,579 (from: https://www.tax-rates.org/new_jersey/property-tax ).
George II
(67,782 posts)...which means close to half are above the cap. Plus, if one adds NJ income tax to the property tax, much more than half the taxpayers in New Jersey are above the cap.
That means hundreds of thousands of people in New Jersey are hurt by the cap, and I guarantee they're not all billionaires, millionaires, or "wealthy".
There is no rational or logical reason to retain the cap in the name of "helping the working class".
https://patch.com/new-jersey/across-nj/every-nj-towns-average-property-tax-bill-new-2021-list
PoliticAverse
(26,366 posts)which is naturally weighted higher by higher property values. The median ('half below', 'half above') property tax amount in New Jersey as I posted was about $6,579 (from: https://www.tax-rates.org/new_jersey/property-tax ).
Note that in 2021 the non-itemized personal federal tax exemption is $ 12,550.
If you actually want to protect lower-income people rather than the wealthy then propose capping the SALT deduction by income.
lagomorph777
(30,613 posts)George II
(67,782 posts)In states like Connecticut, New York, New Jersey, and California, even VERMONT, it doesn't take much to reach $10,000 of combined taxes. For many real estate taxes are $10,000 or more. Add in state income taxes and many more join that group.
I can't believe that this isn't obvious to everyone including Sanders.
MANative
(4,112 posts)For the area we live in, we don't break the top 35%. Dramatically higher cost of living here, inclusive of tax burden, erodes the real value of our income by at least 20-25%. Real estate taxes alone are about $11K on a 65-year-old 3 BR ranch.
George II
(67,782 posts)....you rub shoulders with!
Seriously, there are a lot of ordinary Americans being hurt by the SALT cap. Lost in the discussion is taxable deductions include more than just real estate and income taxes. They also include medical expenses, child care expenses, etc.
I know republicans and others bragged about the standard deduction being "doubled", but that's not quite true, it only went up 1.8X. At the same time the personal and child exemptions were eliminated. For a family of 4 that was quite a bit.
So, let's just look at some typical deductions.
A family's deductions could be:
$9,000 property tax
$5,000 state income tax
$15,000 medical expenses
So they normally would have an aggregate of $29,000 in deductions. But with the cap, that would bring it down to $25,000. Their taxable income is $4,000 higher than it would be without the cap.
This is not atypical of a normal, middle class, NOT rich family of four. The cap is hurting them.
What Senator Sanders either doesn't realize or cares to admit is by supporting the SALT cap he's even hurting many of his own middle-class, not rich, constituents in Vermont.
There isn't a single billionaire living in Vermont, and Vermont has among the highest combined income and real estate taxes in the country. And there are very very few "rich" running around Vermont these days. At least not many outside of North Hero.
George II
(67,782 posts)There are many people in CT that live in an apartment with a bunch of roommates or a trailer home. Should these people have to subsidize folks that live in average to nice houses? Im speaking as a person with an average to nice house. Just my opinion.
George II
(67,782 posts)TheFarseer
(9,323 posts)uponit7771
(90,347 posts)TheFarseer
(9,323 posts)But the biggest contributors to itemized deductions are real estate taxes, mortgage interest and state/local income tax. The middle class and wealthy are the people that are going to be paying this in high enough dollar amounts to itemize. Poor and working poor would see no benefit. Thats just a fact.
Response to TheFarseer (Reply #33)
uponit7771 This message was self-deleted by its author.
uponit7771
(90,347 posts)betsuni
(25,537 posts)voters. He believes the party can do better by selling simple economic programs that directly benefit the working poor." (From the Axios article.)
Non college-educated whites do not vote Republican because of the lack of Democratic policies that would improve their economic situation. We've gone over this a million times.
"'The Democrats over the years have become more and more of a corporate party and have turned their backs on the working class of this country,' he said. 'You're an average white worker in America, for example, what have you seen the Democrats do to stand with you?'"
Wrong. We've also gone over this a million times.
NurseJackie
(42,862 posts)Bernie, Bernie, Bernie.
betsuni
(25,537 posts)George II
(67,782 posts)He's supposed to be on the side of the working class. Why doesn't he understand why the elimination of the SALT deduction has hurt tens of millions of working class Americans, many of them "non-college educated" workers.
In some areas the SALT deduction could represent 20% or more of a person's income.
Cha
(297,300 posts)what he does.. drags on the Democratic Party.
I guess he hasn't noticed what President Joe Biden, Speaker Nancy Pelosi and Majority Leader Chuck Schumer have Done to help PEOPLE!
Especially sad since we have Democratic Campaigns to Win in 2022.. all hands on Deck Again!
Still Fighting FASCISM!
betsuni
(25,537 posts)folks who have a lot of money ... I think for many, many years the Democratic Party has not paid the kind of attention to working class needs they should've."
Cha
(297,300 posts)he would realize that kind of wrong headed talk is NOT working after all these years.
So Grateful Joe Biden is our President!
George II
(67,782 posts)betsuni
(25,537 posts)But that's different! Totally not "wealthy and powerful" or "coastal elite." TOTALLY DIFFERENT BECAUSE.
Why is he singling out just white workers as an example, are POC not a part of the working class?
betsuni
(25,537 posts)George II
(67,782 posts)The white (and rest of the) working class is being hurt by retaining the cap. Tens of thousands of taxpayers in VERMONT, virtually all white working class, are affected by the cap.
This isn't good for the revolution.
betsuni
(25,537 posts)The ideas is that if "simple economic programs" are just explained to the white working class, they'll unite in solidarity against the 1%. As if they don't know that Democrats are the party of government helping improve people's lives. They know.
Johonny
(20,851 posts)The small things like SALT deduction used to help, without them us living in high population states just become donor states to small over-represented states. Thus our local taxes climb ever higher to overcome our federal budget gap. Why is it me that needs to save Trump's tax cut budget short falls?
For the record, the hatred of the SALT cap got us purple districts in 2018. It's a winning issue in purple districts. It's a winning issue.
ZonkerHarris
(24,229 posts)George II
(67,782 posts)There are a LOT of lower middle class workers in both NY and CA who were locked out of buying even a starter home when that deduction was eliminated.
NY and CA combined have roughly 20% of the nation's population. Maybe it wouldn't hurt as many in Vermont, which has less than 0.2% (that's two TENTHS of one percent!) of the nation's population.
But millions of Americans have been hurt by this.
ZonkerHarris
(24,229 posts)It must be rectified.
George II
(67,782 posts)....was debated 3 years or so ago?
It was a punitive revision to the income tax laws.
For example, we make a little more than $70,000 per year (we're both retired living on Social Security and very small pensions) Our property tax last year was about $5,000 and state income tax was about $2,000. That's roughly 10% of our income for which we did NOT have the deduction!
It's even worse in states like New York and California (where 60+ million, about 20% of the country's population) live. NYC has a state AND city income tax, as does a few other counties. California has some astronomical property taxes.
Not having the SALT deduction prevents younger working class Americans who hope to buy a home. I would not have been able to afford my first home, a cooperative apartment in Westchester, when I was 35, if I didn't have that deduction. Instead I would have paid rent for more years until I could save enough to buy something.
Nancy Pelosi, Chuck Schumer, and DEMOCRATIC leaders are correct. The elimination of the SALT deduction has hurt millions of younger working class people.
But he's right. Bernie, "you have got to make it clear which side you are on." Which side is that???
SYFROYH
(34,172 posts)Also, how is this an example when SALT kicks in when property and state income taxes combine to $10,000?
If people's property and state taxes are too high then they need to work at those levels.
George II
(67,782 posts)Our state income taxes were higher at the time.
Wounded Bear
(58,666 posts)and it's not just "the wealthy" that are affected. With house prices being where they are these days, there are a lot of "middle class" folks who could use these deductions.
SYFROYH
(34,172 posts)Something like $250,000?
PoliticAverse
(26,366 posts)Who Benefits from the State and Local Tax Deduction?
https://taxfoundation.org/salt-deduction-benefit/
Yavin4
(35,441 posts)dollars. It stops double taxation at the federal and state level. States like CA and NY have super high taxes which fund much needed state government programs and makes life easier for everyone in these states. Alternatively, the super wealthy can just move to a no income tax state like TX or FLA which do little to nothing for their citizens.
If the rich leave NY, the state would collapse.
Happy Hoosier
(7,314 posts)I'm not "rich" Killing that deduction costs me quite a bit of money.
DFW
(54,405 posts)My sister and B-I-L live in New Jersey. Both work (or, more accurately, are NOT working since over a year). They have almost no income at all except what the government decides to help them out with, and their property tax eats up close to half of that. They bought a very modest house (used to be a fishing shack) over 15 years ago in a tiny community almost an hour's drive due west from their jobs in NYC. During the Real Estate bubble under Cheney-Bush, they traded it almost even up for another modest house, but on a lakeshore. The State of NJ kept assessing it higher and higher, and hardly reduced the property tax when the bubble burst. So, they are hit with a property tax of something like $14,000 on an overvalued house. With what they are able to scrape up in income, if they can't deduct that from their 1040, they suck wind (which they indeed are, right now)--and they are fervent Bernie fans (or were, anyhow, until he started agreeing with Trump and asking them to pay their unfair share). New Jersey is a "giver state," i.e. they get less back from the Federal Government than they pay in. They help subsidize the taker states, i.e. the ones that take more from the Federal government than they pay in--one of which, incidentally, is Vermont.
This makes it easy for me to declare whose side I'm on, and it's not Bernie's. I haven't even bothered to inquire as to his position on Americans living and working abroad. There are about nine million of us (about 6 million registered voters according to the Democrats Abroad). All countries in the world except three recognize residence-based taxation. Those three are Eritrea, one other small African nation which I forget, and the USA. Those people are subject to double taxation, and while there are treaties between the USA and most other nations designed to eliminate most double taxation, plenty of income falls through the cracks and gets doubly taxed, Foreign Tax Credit notwithstanding. I live in Germany, and I speak from personal experience. Now, I'm sure that among those nine million of us, there are a couple of dozen gazillionaire tax refugees living on yachts harbored in Monte Carlo or the Caymans. Bernie can surely grab himself a few free "Bernie said!" headlines by railing against them. They'll laugh in his face. Their money is all offshore already anyhow. They'll toss their US passports in the ocean before they toss their money Bernie's way, and they'll buy themselves a perfectly legal passport from Costa Rica, or Gibraltar or wherever. But the other 8,999,950 of us are subject to double taxation and/or four or five figure yearly accountants' fees, so as to be upstanding taxpayers in both Washington and their countries of residence.
uponit7771
(90,347 posts)lagomorph777
(30,613 posts)Now Bernie is favoring a middle class tax hike?
boston bean
(36,221 posts)I said this nicer than I wanted too.
sheshe2
(83,789 posts)George II
(67,782 posts)In October 2019 there was a Senate vote to repeal the SALT cap. It failed.
Senators Sinema and Manchin both voted to repeal the cap.
Senator Sanders skipped the vote.