Analysing the Democrats' large spending bill revealed that the highest dollar-value tax cut would be for the top 1%.
The average tax reduction for taxpayers earning between $500,000-$1 million is more than $6,000 in the next year.
The bill raises taxes on top 0.1% of households, and the average household with over $1,000,000 will pay over $65,000 more.
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Democrats have been talking a lot about how to pay for programs that support working families through taxing the wealthy. But the most recent version of their plan would provide a massive tax cut to the majority of the 1% wealthiest Americans.
But what about the top 0.1%? They will be subject to higher taxes.
The $1.75 trillion spending bill has been a source of endless debate for the Congressional Democrats. The proposal's pay-fors (or tax changes to offset the cost of new spending) is key. To pass the plan, Democrats will need the support of centrist members. Sen. Joe Manchin and other centrists demand that the package be fully funded by new taxes.
The proposed law includes a new provision that allows you to deduct more local and state taxes from your federal tax bill. Because they are more likely to face high local taxes, the SALT deduction would be a major benefit for wealthy taxpayers living in high-tax states.
The Tax Policy Center's analysis of the new bill has shown that while most Americans will receive a tax cut for incomes below $1 million, the Tax Policy Center found that those at the top of the spectrum, the only rich who make between $500,000 to $1 million, will see a larger dollar-value tax reduction than the majority of the working class.
The bill does include a significant tax increase on the very wealthy. According to the Tax Policy Center, an average taxpayer earning over $1 million per year will see a $65,000 increase in their federal tax bill.
SALT deduction is a new issue in already complicated negotiations. The "SALT Caucus," a bipartisan group of legislators, has been fighting to remove the caps on the deduction. The movement has also been supported by key Senate Democrats. The caps were imposed by the Republicans in 2017. This was according to Senator Ron Wyden, who told Insider's Joseph Zeballos Roig that it was about punishing blue-state voters. The caps eliminated a tax break that was available to high-earners who live in states with high incomes and high property taxes.
Others believe that repealing the SALT cap would be an inefficient move to aid financially-stable Americans. In a November 2 tweet, Sen. Bernie Sanders stated that giving more tax breaks to wealthy individuals is "the last thing" that we should do.
He said, "Democrats campaigned for and won an agenda that requires that the very rich finally pay their fair share, and not one that gives them additional tax breaks."
Another analysis shows that a repeal of the SALT-cap is not only a biased benefit but also a very costly one. According to the nonpartisan Committee for a Responsible Federal Budget, families earning between $50,000-$150,000 could receive $2,600 annually from the extended child tax credit. In contrast, households with a household income of more than $1million would earn $25,900 annually from the SALT repeal.
Even with the SALT deduction, the social-spending plan will be paid in full. The plan's benefits are obvious to working Americans. However, the rich can expect a huge tax cut.
