President Biden's House-passed $1.8 trillion Build Back Better bill promises to expand the social safety net for the poor, but its mostly costly provision is a tax cut for the wealthy, leaving divisions among Democrats.
While many Democrats celebrated the Friday passing of the historic bill, which now heads to the Senate, where the controversial state and local tax, or SALT as it is known, deduction cap could be up for the chopping block.
In the bill's current form, taxpayers could deduct up to $80,000 in state and local taxes from their federal tax bill, up from the $10,000 cap put in place as part of the Trump 2017 tax cuts.
Trump instituted the SALT cap, which disproportionately targets wealthy people in high-tax states, as a way to offset other tax cuts in the 2017 bill. Other tax cuts Trump initiated will not be rolled back, meaning that many high earners could stand to have an even lower tax bill under Biden than under Trump.
The proposal was not included in Biden's original proposal, but was later added after a group of moderates from high-tax states like New York and New Jersey, Reps. Bill Pascrell, N.J., Tom Suozzi, N.Y., Josh Gottheimer, N.J., and Mikie Sherrill, N.Y.
Other proposals that could be nixed in the final bill are a plan to give undocumented immigrants who entered the country before 2011 the option to apply for renewable work authorizations and four weeks' paid family leave, which key moderate Democratic Sen. Joe Manchin has thrown cold water on.
Rep. Jared Golden, Maine, was left the lone Democratic defector on the bill
Democratic socialist Sen. Bernie Sanders said of the SALT plan: 'It's bad policy, it's bad politics'
Rep. Josh Gottheimer, D-N.J., led a group of coastal Democrats in threatening to tank the Build Back Better plan if it didn't include raising the SALT cap
And while most all House progressives voted for the bill's tax cut, Rep. Jared Golden, Maine, was left the lone Democratic defector on the bill.
'The current House version of SALT gives millionaires thousands in cash, while people who make less than ~$100,000/year get less than $20 on avg. This policy costs $286 billion. Why would we do that?' Golden said in a tweet, where he also advocated for a billionaires' tax on capital gains.
Golden, up for a contentious reelection battle next year, said Wednesday in a tweet that it seemed like 'Republicans were in charge.'
'The fact that more people and orgs on the Democratic side aren't up in arms about this is wild,' he wrote.
According to the nonpartisan Tax Policy Center (TPC), middle-income households would get a tax break averaging $20, as only 10 percent of all filers even itemize their deductions.
Roughly 98 percent of the benefit from the increase would accrue to those making more than $100,000 per year, with more than 80 percent going to those making over $200,000, according to the nonpartisan Committee for a Responsible Federal Budget (CRFB).
House Speaker Nancy Pelosi, whose wealthy constituency in San Francisco stands to win big by lifting the cap, promised to 'fight' to make sure the SALT proposal remains in the final bill on Thursday.
'As a supporter of that particular measure in the bill, that's not about tax cuts for wealthy people,' Pelosi, D-Calif.,
