You know it’s just another one of those things. Donald Trump is still winning, even while out of office. And again, it centers on the former president’s economic policy. We all saw Joe Biden pitch his multi-trillion-dollar infrastructure plan this week. On its face, it’s not a bad idea. Infrastructure is something that should be maintained, upgraded, and take care of—even Adam Smith knew this was a key function of government. The problem is this bill does none of that. It’s pretty much Green New Deal lite. It has caught the attention of labor unions who know this bill could potentially screw their members over. Yet, what Biden plans to maintain from the previous Trump administration concerning SALT taxes could imperil this massive undertaking. Axios had the scoop:
President Biden is unlikely to propose reinstating state and local tax deductions in his second tax-and-spending package despite pressure from several fellow Democrats, according to people with direct knowledge of the planning.
The SALT deduction is a top priority for a number of Democrats representing blue states. Its supporters include Senate Majority Leader Chuck Schumer, House Speaker Nancy Pelosi and — during the Democratic primary — Biden himself.
The president is now signaling he won't fight to lift the caps that former President Trump imposed as part of a 2017 tax package that lowered corporate rates.
A commonly held view at the senior level of the Biden administration is that capping SALT — which Trump did to save money and punish his blue-state enemies — was actually good policy.
Senior Biden officials have soured on SALT deductions for two main reasons: It would undercut their working-class message and would cost them a fortune.
Reinstating SALT would reduce revenues by an estimated $70 billion to $80 billion a year, roughly half the annual amount that Biden has proposed to raise by hiking corporate rates.
This isn’t the only Trump tax policy Biden officials have signaled they could maintain. In fact, the massive tax cuts Trump signed into law that sparked massive economic growth and job creation might be kept largely intact. Yes, we all know Joe wants to increase the corporate tax rate, but the middle-class tax cuts could become permanent. In 2017, when these cuts were passed, even Bernie Sanders said it was a good thing that Americans were getting a break. He did move the goalposts by saying the bill didn’t go far enough, though it torched the Democrats’ narrative on the cuts. This didn’t benefit just the wealthy; 91 percent of middle-income Americans got relief.
.@jaketapper: “Next year, 91% of middle income Americans will receive a tax cut. Isn’t that a good thing?”@BernieSanders: “Yeah, it is a very good thing. And that’s why we should’ve made the tax cuts for the middle class permanent” #CNNSOTU https://t.co/ei8xTHGo1E— CNN Politics (@CNNPolitics) December 24, 2017
Same analysis finds that 75.5% would see a tax decrease in 2025 compared to current law. The average decrease is $2530. 8.9% would see a tax increase. https://t.co/RopZNFqZPW pic.twitter.com/ewdM4vLtUd— AG (@AGHamilton29) December 19, 2017
It’s as if Trump’s economic policies were indeed good initiatives that helped the middle class. I’m glad to see the Biden administration admit that, even though they can’t explicitly say so.