White House Lowers Expectations for SALT Cap Increase

The Biden administration cautioned against expecting an increase in state and local tax (SALT) deductions if President Joe Biden wins re-election, according to a report by Bloomberg.

Many of the income tax cuts from 2017, signed into law by then-President Donald Trump, are set to expire after 2025. Residents in high-tax areas like New York and California are pushing for a larger expansion beyond the $10,000 limit on SALT deductions.

Biden’s top economic adviser played down the likelihood of this happening.

“The president has been clear in his stance that he does not believe the wealthiest Americans need another tax break. So, I believe this principle will shape his or his team’s approach to the SALT cap,” said White House National Economic Council Director Lael Brainard during a call with reporters, as reported by Bloomberg.

Brainard stated that a potential second Biden administration would focus on raising taxes for big corporations and billionaires.

“Tax fairness is a strong sentiment among people. They find it unjust that someone earning hundreds of millions pays a lower percentage of their income compared to a teacher or firefighter,” Brainard explained.

If all the 2017 tax cuts expire, most U.S. households would face higher tax payments to the IRS.

If the tax cuts are extended, an extra $4.6 trillion, including debt service costs, would be added to the national debt over the next decade, as per the Congressional Budget Office.

Republicans are preparing to expedite the extension of the Trump tax cuts through the reconciliation process if they gain control of Congress in November, lawmakers informed The Hill. Reconciliation enables the passage of significant tax and spending bills with a simple majority.

Trump’s allies have urged him to decrease the SALT deduction to offset other tax cuts, stated Bloomberg.

In addition to the $10,000 SALT cap, reductions in individual tax rates, a tax break for privately owned businesses, and a decrease in inheritance taxes are also scheduled to terminate.

Biden has expressed his intention to let the income tax cuts for the wealthy expire while safeguarding those earning less than $400,000 annually from tax increases, as reported by CNN.

The president has also proposed raising the corporate tax rate from 21% to 28%.

Charlie McCarthy

Charlie McCarthy, a writer/editor at Newsmax, has nearly 40 years of experience covering news, sports, and politics.

© 2024 Newsmax. All rights reserved.

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