Democratic Colorado Sen. Michael Bennet claim The state and local tax (SALT) deduction benefits “the wealthiest people in very blue states on the East and West Coasts.”
👀 Democratic Sen. Michael Bennet on the SALT cap debate: “SALT benefits go to the wealthiest people in very blue states on the East and West coasts. Why are Colorado's firefighters and teachers on it? I don’t understand why we need to provide funding.”
— Jeff Stein (@JStein_WaPo) December 10, 2024
Verdict: Truth
SALT benefits will primarily go to high-income taxpayers, several tax experts and think tanks told Check Your Fact via email. One expert said wealthy people in non-blue states are also benefiting from SALT.
Fact check:
The federal government reportedly told the Second Circuit that some states should be prohibited from challenging the Treasury Department's rules on caps on SALT deductions. bloomberg. New Jersey and Connecticut claimed a “lack of position” during the policy change.
Jeff Stein, the Washington Post's White House economics correspondent, posted that Bennett said SALT would benefit the wealthiest people.
“SALT benefits go to the wealthiest people in very blue states on the East and West coasts,” Bennett said. “I don't understand why Colorado firefighters and teachers need to fund it.”
According to SALT, taxpayers who itemize when filing their federal taxes can deduct certain taxes paid to state and local governments. tax foundation. Additionally, the SALT cap limits these deductions to $10,000 per year in property, sales, or income taxes.
Michelle's statement is accurate. According to , homeowners with higher property taxes, such as those living in New York, New Jersey, and California, benefit the most from the SALT deduction. CBS News. According to 2016, approximately 80% of people had itemized incomes between $100,000 and $499,999. tax foundation.
Experts told Check Your Fact that Bennett's claims are correct.
Adam N. Michelle“Bennett is right,” the director of tax policy research at the Cato Institute said in an email to Check Your Fact.
“Senator Bennet is correct. The benefits of the SALT deduction go primarily to high-income taxpayers. For example, if Congress repealed the SALT cap, more than half of the tax reduction would accrue to the top 1 percent. “It will be,” Michel wrote. “Before the TCJA capped deductions in 2017, the average millionaire living in New York or California deducted more than $450,000 in SALT.The average billionaire in Texas deducted more than $450,000 in SALT. , I was only deducted $50,000 and was paying nearly $180,000 more in federal taxes per year.”
Michelle also directed Check Your Fact. web page For more information about SALT, see information from the Cato Institute. (Related: Kamala Harris' proposed capital gains tax rate would only apply to earners of $1 million or more)
He said lifting salt limits would overwhelmingly benefit high-income Americans. brendan dukesenior director of economic policy at the Center for American Progress, said in an email to Check Your Fact.
“More than 90% of benefits will go to the top 20% of Americans, and more than 40% of benefits will go to the top 1% of Americans. The top 1% of households will receive an average tax cut of $35,000. (a 1.6% increase in income), while the median tax cut would be just $30 for the middle 20% of households.
Gary Clyde HufbauerPeterson Institute for International Economics, Non-Resident Senior Fellow, commented that while wealthy people do benefit from SALT, there are still many wealthy people in non-coastal red states.
“Bennett's statement is largely accurate. Only the wealthy pay more than $10,000 a year in state and local taxes, and the wealthy are concentrated in coastal states,” Hufbauer said in an email. ” said. “That being said, there are a lot of wealthy people in red states like Texas and Ohio.”
“Check your facts,” a Tax Foundation spokesperson instructed. map Shows the counties that would benefit the most from eliminating the SALT cap. Counties in California and New York have benefited the most, followed by smaller concentrations in Colorado, Connecticut, Idaho, and Wyoming.
