You ain’t got it, spend it.

Buried in the new Coronavirus relief efforts are many items of spending, like a new FBI building and more jet fighters wanted by Republicans that are unrelated to the pandemic.

But Democrats aren’t above such unrelated spending. Once politicians perceive a green light or excuse to spend money they don’t have, there are no restraints.

The following proposal caught my eye. I find it ironic that Democrats support a tax change that mostly benefits higher income taxpayers with larger homes and higher property taxes, especially given that with the higher standard deduction a property tax deduction means little for average taxpayers. But the real reasons are mentioned in the article.

From the De­mo­c­ra­tic bill passed by the House in May: Repeal the $10,000 cap on the state and lo­cal tax deduc­tion for 2020 and 2021.

WSJ 8-5-20

In their 2017 tax over-haul, Re­pub­li­cans placed a $10,000 cap on the amount of state and lo­cal taxes that tax­pay­ers can deduct from fed­eral tax­able income. Gov­er­nors of high-tax states such as New York and New Jer­sey want Con­gress to elim­i­nate the cap. Do­ing so would help their constituents, make it easier for them to raise state and lo­cal taxes and reduce in­cen­tives for peo­ple to move to lower-taxed states. Re­peal­ing that limit would also de­liver di­rect tax cuts to high-in­come house­holds, and the top 1% of house­holds would get 57% of the ben­e­fits, according to the Tax Pol­icy Cen­ter. “We need to cushion the blow of this virus. The SALT cap hurts peo­ple affected by the virus,” Sen­ate Mi­nor­ity Leader Chuck Schumer (D., N.Y.) said in New York last month. “It hurts so many of the met­ropolitan ar­eas like New York.”

WSJ 8-5-20

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