Democrat Tax Hike Plan Hits Blue States Hardest
Ryan Ellis, Forbes.com
Last week, Congressional Democrats released a detailed tax hike plan they will be running on this fall in the midterms.
What's most striking about the plan, besides the specificity not usually seen in such agendas, is that if the plan became law it would hit blue states and cities much harder than red/Trump states and areas. This is true for several reasons:
The Democratic tax hike plan restores the AMT yet leaves the SALT cap in place. The Tax Cuts and Jobs Act law all but eliminated the alternative minimum tax (AMT) for 4.4 million families. These tax households--mostly six figure mass affluent types living in expensive blue cities and suburbs--used to have to calculate their taxes two ways, and pay the higher (that is, AMT) figure. One of the things they had to do in that calculation was disallow their state and local tax (SALT) deduction. So by being in the AMT, they got no SALT deduction at all.
The new tax law restores the SALT deduction for these families, but caps it at $10,000.