Excerpt:
Since the Republican tax reform of 2017, the federal government has allowed taxpayers to deduct $10,000 of their state and local tax payments from their federal taxes. What the Democrats now seek is a restoration of the unlimited tax deduction that had previously been in place. Only the highest earners hit that cap, so getting rid of it would directly benefit only them. The Tax Foundation estimates that lifting the cap would raise the after-tax incomes of the bottom-earning 40 percent of households by nothing. People in the middle of the income distribution would see an average increase of 0.01 percent. People in the top 1 percent, on the other hand, would receive a 2.8 percent increase. Another analysis, from the Tax Policy Center, found that the top 20 percent of taxpayers would receive 96 percent of the benefit of repealing the cap.
Publication Date: 6 April 2021
Publication Site: National Review