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Coronavirus Relief Bill Should Not Include Handout to the Rich, Should Instead Prioritize Families Struggling to Get By

FOR IMMEDIATE RELEASE:
MARCH 31, 2020

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Coronavirus Relief Bill Should Not Include Handout to the Rich, Should Instead Prioritize Families Struggling to Get By

WASHINGTON, D.C. — The New York Times reported last night on a proposal floating around Capitol Hill to retroactively repeal the cap on the State and Local Tax (SALT) deduction as part of a stimulus plan to offer relief from the economic effects of the coronavirus. Repealing the cap would almost exclusively help the richest taxpayers and not those who actually need relief the most.  

“This bad policy would prioritize putting money in the hands of those rich enough to be paying more than $10,000 in state and local taxes – not those who are struggling to figure out how to pay the rent check that is due tomorrow. That is not where our focus should be,” said Tax March Executive Director, Maura Quint. “We know that Republicans in Congress believe that their job is to protect the wealthy and corporations. We need Democrats in Congress to do what Americans sent them to Congress to do – fight for and protect the middle class. We need champions. Last week, House Democrats put out a relief plan that prioritized workers, those who have been recently laid off, and families. It is not time to abandon them now.”

Repealing the SALT cap in the midst of a public health crisis would not provide support to the millions of people struggling to make ends meet — instead, it would only further enrich the already rich.

“In this moment of crisis, there are dozens and dozens of smart and useful ways that the federal government could help people who are suffering while providing a boost for the economy,” said Michael Linden, Tax March Board member and Executive Director of Groundwork Collaborative. “Retroactively repealing the SALT cap is not one of them. Tax cuts that primarily benefit the wealthy is a bad idea in normal times and it’s a bad idea now.”

“Repealing the SALT caps would do nothing to help the vast majority of Americans suffering right now,” said Angel Padilla, Indivisible Project National Policy Director. “If Democrats want the next phase of their response to be about recovery, then they should focus on supporting the American families most affected by this crisis. They should focus on providing financial security and assistance to the millions of families struggling to cope with lost income, rather than the richest 1% who would benefit most from this bill.”

“This crisis is reminding us what it means that the economy is built from the bottom up, by people who do the essential work that keeps our society intact—health care workers in all jobs, as well as grocery store and food workers, and warehouse and delivery workers,” said Tax March Board Advisory Board Member and Executive Director at Social & Economic Justice Leaders Project Connie Razza. “Last week we learned that there were three million unemployment filings due to social distancing, and right now there’s no end in sight. We’ve spent too many decades cutting taxes for the rich and hoping the scraps trickle down to working people. We know it doesn’t work and cannot be our path now. This crisis is too urgent and the need is too great.“

“Lifting the SALT cap would be akin to sending cash to the richest people in the U.S., with nothing for the poor, and virtually nothing for the middle class,” said Seth Hanlon, Senior Fellow at the Center for American Progress. “More than half of the benefit of eliminating SALT goes to the richest 1%, while the bottom 80% get virtually nothing. As economic stimulus, it would be hard to design a less effective policy – giving cash to the people least likely to need it, and least likely to put it back into the economy by spending it.”

“The Trump tax law has many, many problematic provisions but unfortunately the House Democrats are trying to repeal one of the law’s few provisions restricting tax breaks for the rich,” said Amy Hanauer, Executive Director of ITEP. “Repealing the law’s cap on SALT deductions would not stimulate our economy but would, for the most part, result in larger tax breaks for the well-off. Last December, House Democrats attempted to tailor their proposed repeal of the SALT cap to only help the middle class by combining it with a higher top personal income tax rate. Nonetheless, we found that 51 percent of the benefits of that proposal would go to the richest one percent of taxpayers.”

In fact, even the millionaires who would benefit from the repeal of the SALT cap are speaking out against prioritizing this measure during an economic downturn primarily hurting low- and middle-income people.

“The priority at this time should not be a tax break for the well-to-do. Repealing the SALT cap would be a mistake,” said Morris Pearl, Chair of the Patriotic Millionaires. “The last people who need help right now are the well-off taxpayers who would be affected by this change. Congress should instead be prioritizing low-income and middle-class workers most directly hurt by the economic effects of the coronavirus. As a wealthy New Yorker, I’m not worried about my ability to deduct my state and local taxes, I’m worried about all the people who have lost their jobs or had their hours cut as a result of this crisis and how that will affect my state, my city, and my family in the long run. If Democrats want to be the party of working people, prioritizing tax cuts for wealthy taxpayers, even in blue states, is not the right thing to do. We already have too many politicians in Washington whose answer to every problem is to cut taxes for the rich.”

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