Report: In Bashing GOP Tax Bill, Malloy Protects Connecticut’s RichestMarch 5, 2018
The governor is protesting the GOP tax bill over the limits on the state and local tax (SALT) deduction, but a new report suggests SALT mostly impacts the top-20 percent of earners.
Gov. Dan Malloy (D-Conn.) has made no secret of his disdain for the GOP tax cuts passed in December, saying last year that the bill will “not provide relief to the middle class, but for the wealthiest few.”
Malloy made these comments, despite a nonpartisan study showing the bill will give the average middle-income Connecticut family an $835 income boost, and despite the fact that Malloy has celebrated wage hikes that came as a result of the very tax cuts he opposes.
Now, a new study shows that a key point in Malloy’s disdain for the bill – its limits on the state and local tax (SALT) deduction – primarily benefits the wealthy, and not middle-income families in the state.
The Associated Press reported:
Resistance to the Republican tax overhaul comes with an ideological twist for some Democratic state officials: They’ve styled themselves as champions of the working class but are pushing hard for measures that would reduce taxes mostly for the wealthy.
Democratic governors and lawmakers in a handful of high-income, high-tax states are promoting policies that are intended to spare their residents the pain of the new $10,000 cap on deductions for state and local taxes. Connecticut, New Jersey and New York are even planning to sue the federal government over the new cap, which was a key provision of the Republican tax overhaul adopted in December.
The nonpartisan Tax Policy Center reported in December that “[m]ore than 96 percent of the [SALT-related] tax increases would be paid by those in the top 20 percent of the income distribution”:
High-income households will be the biggest losers from the SALT deduction cap. More than 96 percent of the tax increases would be paid by those in the top 20 percent of the income distribution (those making $150,000 or more in 2018), and more than half would hit those in the top one percent, who make more than $730,000.
Whether readers agree or disagree with the SALT provision in the tax bill, remember this: Malloy’s fight against this provision of the tax bill is mostly about the wealthy, no matter what the liberal governor will say otherwise.
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