Sen. Bernie Sanders blasted the reported deal struck among Democratic negotiators to remove the cap on federal tax deductions for paid state and local taxes for five years.
The Vermont socialist said that doing so would cost $475 billion and give the richest 5% $400 billion in tax cuts.
“As a result, the top 1% would pay lower taxes after passage of the Build Back Better plan than they did after the Trump tax cut in 2017. This is beyond unacceptable,” Sanders said. “At a time of massive income and wealth inequality, the last thing we should be doing is giving more tax breaks to the very rich. Democrats campaigned and won on an agenda that demands that the very wealthy finally pay their fair share, not one that gives them more tax breaks.”
The reports follow months of handwringing over what to do with the $10,000 cap on SALT deductions, which was imposed by Republicans in the 2017 Trump tax overhaul. A vocal bipartisan contingent led by Democrats in high-tax states calling themselves the SALT caucus had vowed to oppose the spending package until SALT relief was included. Repealing the cap would largely benefit high-income earners: Nearly two-thirds of the benefit would flow to the top 1%, according to the Tax Foundation.
Sanders said on Tuesday that he would be open to a compromise that shields the middle class in high tax states but emphasized that its complete removal would not garner his thumbs up.
Jason Furman, a Harvard economist who was appointed by President Barack Obama to serve as chairman of the Council of Economic Advisers, also attacked reports that the SALT cap would be scrapped, calling the notion “obscene.”
“My guess is the majority of Americans with a net worth of $50 to $300 million would get a tax cut under the Build Back Better plan with a full repeal of SALT,” he said. “The bill would do more for the super-rich than it does for climate change, childcare or preschool.”
Sanders’s support is crucial to securing passage of the spending package because Democrats can’t afford to lose a single caucus member in voting for the legislation.