When last we left House Speaker Nancy Pelosi, D- California, she was trying to load up the coronavirus economic stimulus bill with ideological goodies for her supportive left-wing constituencies.
Most but not all of those got shot down in the final bill, but that hasn't stopped her. She'd like to deck up another stimulus plan fairly soon, and one of her ideas for it is just the ticket for her particular retinue of rich friends.
Pelosi wants to raise the $10,000 federal cap on deductions for state and local taxes. Consider that for a moment. This would benefit Americans who are so wealthy they owe more than $10,000 in state and local taxes alone, not to mention their federal tax burden.
It's a bad idea overall and an especially bad one when the concern needs to be on taxpayers who are bearing the brunt of the coronavirus economy.
Pelosi floated the idea in an interview in The New York Times Monday, even suggesting it could be retroactive to 2018 and 2019 tax returns. Her spokesman had to come back and clarify that any changes to the law would - somehow - "be tailored to focus the benefits on middle-class earners and include limitations on the high-end [earners]."
Never mind for a moment that experts say it would not help the people who need the most help.
Let's go back and examine how we got here.
The cap on deductions for state and local taxes was put in place as part of the 2017 Tax Cuts and Jobs Act that put more money in the pockets of Americans and stimulated the economy that continued to purr along until the coronavirus pandemic.
But you remember what Pelosi and her gang of Democrats said then and continue to say - despite repeatedly being proven false by nonpartisan government agencies - about that tax bill? That it only benefits the wealthy.
Well, the truth is she and her particular rich friends in states like California and New York absolutely hated the bill not because it benefited them but because it hurt them in the wallet. Where before if they itemized their taxes they were allowed to deduct all their state and local taxes, for the period of 2018–2025 they will be allowed to deduct only up to $10,000 of state and local property taxes and income taxes (or sales taxes) paid.
The top five states for highest combined state and local tax burden, according to what taxpayers actually spend and per the Tax Foundation, are New York, Connecticut, New Jersey, Illinois, and California and Wisconsin. The top five are solid blue - Democratic - states, while Wisconsin is only slightly less solidly blue than it once was. Tennessee is 47th on the list.
Meanwhile, Pelosi's San Francisco congressional district is among the wealthiest in the nation with a household income - according to census data - of $113,919.
A 2019 report from the Joint Committee on Taxation said of those who would benefit most from the elimination of the state and local taxes cap, 94% earn more than $100,000 and those who earn more than $200,000 would reap the lion's share of the change.
The elimination of the cap, according to the report, would take $77.4 billion out of the treasury, with most of that being saved by those who earn $1 million or more.
It would benefit about 3% of households in middle America, according to the Tax Policy Center.
High-tax states have been trying to get rid of the cap since it was passed. Connecticut, Maryland, New Jersey and New York sued to repeal the cap, a federal judge dismissed it, and the states are appealing. Then, in 2019, House Democrats voted to largely lift the cap, but the Republican-led Senate did not concur.
Pelosi and her husband, according to public records, have a state and local property tax burden of $198,337.62 on two homes, a winery and two commercial properties. A repeal of the cap would save them about $188,000, numbers indicate.
The suggestion by the speaker of the House drew criticism from both sides of the political spectrum.
"This is nonstarter," Senate Finance Committee Chairman Charles Grassley, R-Iowa, said. "Millionaires don't need a new tax break as the federal government spends millions of dollars to fight a pandemic."
"This is not a good idea," said Michael Linden, executive director of the progressive Groundwork Collaborative. "It would not help the economy heal, and it would not benefit the people who need help."
Voters in November should not forget what Pelosi - the highest-ranking Democrat in the government - wants to do for herself and her rich friends and at a time when so many middle-class Americans are losing jobs, threatened with losing their businesses and scared about the future. If she is so brazen to suggest that, imagine how much damage a like-minded Democratic president and Democratic Congress could do if put in charge.