Readers Write: SALT Follies Continue To Entertain


You have to laugh at the battle being fought out over the restoration of the SALT deduction. The controversy is being stoked on The Andy Cuomo Show, and Rep. Tom Suozzi has made it a centerpiece of his legislative efforts, all the while knowing the GOP-controlled Senate will file the request in a paper shredder. The theatre doesn’t end there.

We have the spectacle of The Empire Center’s E.J. McMahon coming out squarely against re-implementing SALT.

Why? His reasoning is – get this – that it chiefly benefits the wealthy! This is coming from a man who has meat axed his own spleen for decades against imposing higher taxes on the wealthy by the state!

Now blatant hypocrisy like this is common, but this one is particularly, pardon the expression, rich. Other Conservative outlets, like the Tax Foundation, which never met a tax cut it didn’t like for the wealthy, are also crying foul for the same altruistic reason. Oddly, they had no problem with the near-total elimination of the estate tax and the reduction in the top marginal tax bracket in the same bill. How odd is that, huh?

There’s also a clever sleight of hand being deployed here, and for those on the left, this poses a bit of a dilemma: most of the states punished by the SALT restriction are Blue states, and we all know this was an act of political cruelty by Trump and his henchmen in the Senate.

However, the SALT restriction was accompanied by an increase in the exemption to $12,000 for single filers and $24,000 for married couples.

The exemption for the child tax credit began at $110,000 under the old law. TCJA expanded that to $400,000. So, we might consider this “progressive” taxation, even if cynically implemented.

But as far as I can tell, no one is proposing those bits of legislation get dialed back along with eliminating the SALT restriction, making it a win-win for the state. Tom Suozzi really had me fooled. All this time I thought he was a middle of the road kind of guy.

SALT has been part of the tax code since 1913 when the income tax was first established. I’m not sure why no one has pursued it, but there is a thin reed of a legal basis behind it, the same one that allows states to pay tax-free interest on state-issued debt to residents living intrastate.

But there is a more sinister backdrop to the movement to repeal.
An economics professor at Pace University I correspond with noted:

“When I lived in Michigan I was horrified to find Grand Rapids City schools used outsourced online classes to offset teacher shortages. Why shortages? Because wealthy folks incorporated East Grand Rapids to hoard tax revenue. Grand Rapids was an incredibly segregated place. A poster child for how zip code dependent economic freedom can be. The saddest part for me was the colleagues who thought it was awful, but “we still moved to East Grand Rapids for the schools.”

Ah, the limiting societal effect of rational self-interest.”

Sound familiar? Your county works exactly like this, and it’s done a lot of damage for the residents who don’t happen to work for no-bid law firms.

The other reason for advocating SALT? It gives the civil service unions the fiscal runway for a gym teacher to pull down $145,000 a year. There’s only one way to make that palatable for the wealthy. By expensing the cost.

Of course, there is a way to restructure our revenue and spending stacks to repair this. But that’s too much like work and it would take political courage.

There’s no chance of that happening with our hand-picked class of political deadbeats. I mean, who has the time, what with Martin Luther King Day coming up?

“While probably no former time tolerated so many diverse opinions on religious or philosophical matters, factual truth, if it happens to oppose a given group’s profit or pleasure, is greeted today with greater hostility than ever before.” – Hannah Arendt
Ever thus.

Donald Davret



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