MINOT, N.D. — The Democrats have become the party of the rich.
"Democrats represented 65% of taxpayers with a household income of $500,000 or more in 2020, according to IRS data, while 74% of taxpayers in Republican districts have household incomes of less than $100,000," the Washington Examiner reports. "In 1993, the dynamic was reversed, with the typical Republican congressional district showing it was 14% wealthier than its Democratic counterpart. In 2020, data shows those Republican districts were now 13% poorer."
SALT stands for state and local taxes, and as tax policy, it is what it sounds like. Tax filers who itemize can deduct certain state and local taxes on their federal income taxes. That's a big deal for people who live in high-tax states which, not coincidentally, tend to have Democratic leadership.
It's easier to live with higher state and local taxes when using those payments to reduce your federal tax obligation.
The states where the deduction is worth the least? Except for Nevada, they're all states that voted for Donald Trump in 2020.
North Dakota comes in dead last on the list:
This data reflects 2016 tax data, which was before the Trump tax cuts became law.
That policy capped these deductions at $10,000, which I suppose makes this facet of those tax cuts not a tax cut at all, but rather a tax hike for those taking the deduction.
But, it's a tax hike on rich people. I find classism nauseating, personally, but our liberal friends are obsessed with it, and there's no question that the SALT deduction benefits the most affluent tax filers. Please don't take my word for it. Here's no less an authority than left-wing class warrior Rep. Alexandria "tax the rich" Ocasio-Cortez:
I am open to taking a look at SALT and addressing concerns for families put under the squeeze in high cost of living areas.— Alexandria Ocasio-Cortez (@AOC) September 17, 2021
But a full 100% SALT repeal means major tax breaks for extremely high-net worth individuals and billionaires. Why do that? 🙅🏽♀️
Rep. Ocasio-Cortez, to her credit, is fighting her party when it comes to repealing the SALT deduction cap.
But it's not just about classism, poor-versus-rich rhetoric.
This is also, fundamentally, about civics.
In America, we believe in government by the people. We elect representatives to make policy, and then we use taxes to raise funds necessary to pay for that policy. In a perfect world, there would be a cause-and-effect relationship between the amount of government we vote for and the amount we're taxed.
At the national level, and even in many states, the politicians have become deft at delivering big government without the cost, either through tax schemes that focus the expense on an unsympathetic minority ("the rich," for example) or through debt accumulation, an issue Democrats don't care about at all, and Republicans only pretend to care about when they're not in charge of appropriations.
The SALT deduction further obscures the relationship between the size of the government and the cost. High-tax states, like Minnesota and others, can get away with those higher taxes in part because they're being subsidized by federal tax dollars.
This is why the rebuttal to this subsidies-for-high-tax-blue-states, the one that starts citing farm subsidies and transportation funding for long rural roads as evidence that the red states are dependent states, isn't particularly apt.
We can debate the efficacy of farm subsidies or highway budgets, but Minnesota taxes ought to be paid by Minnesotans. If Minnesotans feel their taxes are too high, they should set about finding new leadership, not support federal policies that pass the buck to North Dakotans.
We shouldn't be debating a cap on SALT deductions. We should be talking about getting rid of the deduction altogether.
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Rob Port, founder of SayAnythingBlog.com, is a Forum Communications commentator. Reach him on Twitter at @robport or via email at firstname.lastname@example.org.