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Alexandria Ocasio-Cortez’s tax idea is big and bold — but not that radical

2 13 152
08.01.2019

Rep. Alexandria Ocasio-Cortez (D-N.Y.) has caused an uproar by proposing a 70 percent marginal tax rate on earnings above $10 million, the “tippy-top ” of the income scale, as she puts it. Conservatives are crying confiscatory taxation, and progressives are rushing to Ocasio-Cortez’s defense.

Amid all the hubbub, no one is paying attention to a really dubious tax idea emanating from another New Yorker in the new Democratic House majority.

Thirty-year House veteran Nita M. Lowey, from the tony suburbs north of the Big Apple, is touting a bill to restore full federal deductibility of state and local taxes, the so-called SALT break, which President Trump’s 2017 tax bill dramatically shrank.

That provision hit high-income residents of wealthy suburbs, who are more likely to own expensive houses with large property tax bills, to pay top state income tax rates and to itemize deductions on their federal returns.

Fifty-six percent of the benefits from reinstating the SALT break would go to the top 1 percent of households, those making $755,000 or more, according to the Tax Policy Center. It would also resurrect the nontransparent situation whereby residents of low-tax states cross-subsidized their counterparts in high-tax states.

What’s more, it would be contrary to the long-term trend, however fitful, toward efficiency in the individual income tax code that began with the landmark 1986 tax........

© Washington Post