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I understand why certain Dems support removing the cap. I get the politics of it.
I just oppose it because of my general distaste for regressive taxes. The people really being squeezed by this are those on the upper end of the income bracket
The only argument I have heard that I am somewhat sympathetic to is that these states have relatively bigger welfare systems so you are directly supporting them with SALT. And I kinda see that point but I would prefer we have a larger federally funded and administered welfare state and give more tax breaks to lower-income people.
But what is really pissing me off is that now some centrist Dems have issues with other taxes increases Biden is proposing. Like if you want SALT cap removed, ok, but ****ing stop there. It is one thing to look out of the upper-middle class, it is a whole other thing to look out for millionaires and billionaires.
I would be less pissed about if we were doing more to address housing costs for lower-income people so they can afford to live in these same states and take advantage of the relatively higher social spending.
I’ve been saying, I don’t want a tax cut but given the current political realities, I want an unlimited SALT deduction along with even higher California tax rates. Basically, Sacramento is more left than Washington. Even when there’s a Democratic trifecta in DC, our counter majoritarian institutions make it so that conservatives have an outsized influence in national politics. Add to that the economic reality that DC can print money and States largely have to pay as they go. So give the governing entity, that tries harder to help low income people and has more fiscal constraints, an enhanced ability to raise money and marginally reduce the amount of dollars that get remitted to the Federal government which could easily print the difference.
Big picture though, it’s not huge either way. The elasticity of inter State capital flight is vastly overstated by the right and ultimately, the federal government is the primary driver of domestic policy.
And for anyone who doesn’t want to hear a marginal-this-monetary-policy-that argument. The best shorthand argument against the SALT cap is that Donald Trump supported the SALT cap so you know it’s bad.