New York Representative Tom Suozzi is a centrist Democrat who hails from suburban Long Island. He has been attacking the left for weeks and is likely to leave Congress in a matter days ahead of a possible 2022 campaign for governor. Suozzi is attempting to get a huge tax cut through the House as his last act. disproportionately favors wealthy homeownersOnly a few liberal states allow it. Suozzi is furious because progressives are fighting to expand this tax deduction known as SALT. “SALT is a very progressive policy,” he told SalonIn a heated telephone interview.
Suozzi, the vice-chair of the bipartisan Problem Solvers Caucus, has repeated his “No SALT, no deal” mantra for months, in reference to President Biden’s Build Back Better package. Now he’s frustrated that his proposal, an $85 billion annualTo make room for key Democratic priorities, Congress is reducing the tax cuts that would overwhelmingly go to the top 5% earners. He’s furious that his state got screwed by the Trump tax cuts. He’s angry that the rich, he says, are leaving New York’s high tax rates for Republican tax havens like Florida. And he’s had it with “phony-baloney” narratives on the left, and insists that a tax break designed to keep wealthy people in Northeast Corridor states, where their taxes fund the Democratic agenda, is a “progressive” policy.
A group of moderate DemocratsSuozzi and Josh Gottheimer, both from New Jersey, have issued a last-minute ultimatum requesting that the cap on State and Local Tax Deduction (SALT) be removed. The Trump-era policy change of that cap, which limits the amount that high-earners can subtract from their federal taxes (to offset taxes local), was $10,000. Democrats now face a huge narrative problem after this internal fight over a poorly understood tax policy provision.
Democratic leaders have claimed for months that Biden’s signature spending proposal would be funded by rolling back the 2017 Trump tax cuts on rich and corporations. But after Sen. Kyrsten Sinema, D-Ariz., torpedoed that plan — despite having previously campaigned on exactly that issue, one of the only aspects of the 2017 Republican tax bill that Build Back Better may actually reverse is a Tax increasesIt mostly affected families with incomes over $250,000.
Suozzi defends the possibility of a rollback in an interview with Salon: “In addition to the fact that this money goes to middle-class families as well as wealthy families,” he said, “this is about not chasing people out of our high-tax states to these low-tax states.”
Economists on both the left and right have rejected the claim of a SALT deduction benefiting the middle class. Instead, they cited years of research that showed that most of its benefits aren’t. concentrated among top earners.
“I guess it depends on what you mean by middle-class,” said Howard Gleckman, a senior fellow at the nonpartisan Urban-Brookings Tax Policy Center. His group defines middle-income as those making between 40% and 60% of the country’s income distribution, or a range of roughly $50,000 to $100,000. According to the The U.S. median salary was $67,500 in 2013. Census Bureau.
“Middle-class in New York is very different than middle-class in Oklahoma or Iowa or North Dakota,” Suozzi argued. “In New York, a person who’s making $120,000 a year or a family that’s making $150,000 a year or $200,000 a year is middle-class, whereas in some of those other places they’d be considered wealthy people.”
This appears to be a question of perception: People at that income level may well consider themselves middle-class, given New York’s inflated cost of living. In fact, New York’s median household income in 2019 was $69,000 and $39,000 respectively. census data. New York City has one of the most beautiful cities in the world. highest ratesIncome inequality in the U.S. is even worse. The average household income is only around $25,000 $64,000. But it’s certainly true that Suozzi’s suburban constituents are much better off. His Long Island neighborhood, one of America’s most affluent, boasts a median income of more than $126,000.
Gottheimer is the informal co-leader for the SALT repeal coalition and has made similar arguments. A representative for the congressman stated that Gottheimer, the informal co-leader of the SALT cap repeal coalition, has made similar arguments. Salon: “The average property tax in Vermont is $4,300, but in New Jersey’s Fifth District, the average property tax is more than $15,000 — making the State and Local Tax deduction a middle-class issue.
Other supporters of SALT have provided higher estimates. Rep. Tom Malinowski is another New Jersey Democrat. said that people earning more than $400,000 per year “would not be considered wealthy because of the cost of living” in districts like his. Malinowski, who proposed to increase the cap to $72,500, before it was raised again to $80,000, represents a suburban New Jersey district where the household income averages more than $115,000 according to census data.
However, the potential increase in cap size suggests that benefits will flow for people who make more than that.
“There are very few people in the middle class who are paying between $72,500 and $80,000 in state and local taxes,” Gleckman said. “This marginally changes things for very, very high-income people, people making $500,000 or $600,000 a year, but it doesn’t do anything for middle-class people.”
Democrats won’t be able to sell this plan to voters, he said. “Maybe they can in Short Hills, New Jersey. But they can’t in most of the country. People are just not going to buy it.”
Suozzi is a longtime favorite of some of New York’s wealthiest residents — and he’s made no secret of the fact he has higher aspirations. Real estate developers and government contractors sent big donations to Suozzi when he served as executive of Nassau County executive, just east of New York City, which includes many of the region’s most affluent towns. His failed 2006 Democratic gubernatorial primary campaign against then-state Attorney General Eliot Spitzer — who was known at the time as crusader against Wall Street corruption — was largely fundedKen Langone, cofounder of Home Depot, was a prominent Republican donor and former member the New York Stock Exchange. Spitzer was then suing Langone.
Suozzi stated last week that he was “seriously considering”Another run for governor against Kathy Hochul, a Democratic incumbent. Kathy Hochul holds the seat because Andrew Cuomo was forced out by a growing sexual harassment scandal. Suozzi is expectedto announce it by the end the month. He even hinted at it the last time that he ran to be governor. presidential ambitions.
During his interview with SalonSuozzi praised his political experience in New York where he has been a mainstay for nearly 30 years. Now a three-term congressman — whose son plays pro baseball for the Brooklyn Cyclones, a minor-league team affiliated with the New York Mets — Suozzi was previously mayor of Glen Cove, where both his father and an uncle were mayors before him.
He was elected to lead the Nassau County government. bolstering a reputationas a centrist fiscal-minded fiscalist who won Republican-dominated regions and helped boost the struggling suburban economies. Suozzi was well-known (or not) for his contributions to the recovery of the struggling suburb economy in 2000. feudSheldon Silver, then-State Assembly Speaker, and what Suozzi called his “Fix Albany” campaignThe attack on several long-serving state legislators made him a pariah in New York Democratic Party. barred SuozziFrom being a delegate to the Democratic National Convention. After losing his 2006 race by 62 points to Spitzer, Suozzi lost his Nassau County chair to a Republican in 2009. He then lost a rematch in 2013.
After a stint at the investment bank giant, LazardAfter a tight five-way Democratic primary, Suozzi made a remarkable comeback in 2016, winning his House seat. His third term in Congress was primarily focused on two things.
Despite his own mixed electoral record as an avowed centrist, Suozzi has blamed last week’s Democratic defeats in Virginia and elsewhere on the “far left.” He has proudly said that he was the only prominent New York Democrat who supported Buffalo Mayor Byron Brown’s write-in campaign over the actual Democratic nominee, socialist India Walton, whom Suozzi called an “extremist” for wanting to shift funding from the police department to social services.
“We have to stand up to the far left because that message from the democratic socialist wing of the party is destroying the party,” Suozzi said last week.
Suozzi has framed the moderates’ fight against the progressive left as a battle for the survival of the party, comparingBernie Sanders, I.Vt. Chairman, Senate Budget Committee to Donald Trump During a Zoom call last week, Suozzi urged democratic socialists to “form a new party instead of trying to change the Democratic Party.”
“If we let them win, we will lose everything,” he said during a speech in Buffalo last month, urging supporters to “defeat the socialists.”
Suozzi is not the. only Democrat blaming the party’s obvious electoral problemsProgressives. He has even more Democratic allies in his fight to repeal SALT, which has caused party divisions along lines other than the traditional moderate-progressive divide. The ragtag coalitionThe Democrats from high-tax state Democrats include both moderates and progressives, as well as leaders like Nancy Pelosi (D-Calif.) and Chuck Schumer (D-N.Y.).
They claim that their constituents were screwed because they are wealthy in blue states. Suozzi and Gottheimer have been vocalizers of their views more than Gottheimer, co-chair of bipartisan Problem Solvers Caucus. thrown up roadblocksAll along the way in Build back Better negotiations. Suozzi and Gottheimer have made their “No SALT, no deal” mantra a mainstay in Capitol Hill press statements since the summer — and Suozzi even threatened to publish a list of individual New Yorkers who donate to candidates that oppose the SALT cap repeal, accusing them of “funding their own demise.”
“People leaving New York, they say ‘Listen, we can’t take these taxes anymore,’” Suozzi told Salon. “And the cap of the State and Local Tax deduction is making it even harder to live here. We’re having a race to the bottom in America where people are leaving our states and going to these lower-tax jurisdictions.”
Suozzi also argued that progressives should get behind the SALT cap rollback because the state’s wealthy residents support a high tax base that funds progressive priorities.
“Taxes are higher because we have unions,” he said. “We pay teachers more money because we value our future. This means we have higher income taxes and property taxes to pay for state assistance. We have the lowest rates for uninsured children, and adults, because we opted in to the Affordable Care Act and did the most we could. We have this major mass transit system that’s very good for the environment but it’s also very good for the economy.”
He said that if wealthy people leave New York, then the state would have either to raise taxes or cut progressive programs. “So we should be supporting SALT so we can help our progressive states.”
Suozzi argued, correctly, that “New York is the biggest net donor to the federal government of any state in the United States of America,” pointing to a Rockefeller InstituteNew York taxpayers owe $142 billion more to federal government than they get back, according to a study. “It’s just not fair that people are taxed on the taxes they’ve already paid,” he said.
The SALT cap was pushed by conservative think tanks like the Heritage Foundation for decades, he said, to “pressure progressive states not to be progressive. Let’s remember that this was Donald Trump and the Republican majority in the House and the Senate that put this in place. It was a conscious decision to hurt those states that didn’t vote for Donald Trump and the Republican majority.”
There are some progressive lawmakers who support lifting the cap, including Bernie Sanders, although he has said that while that’s better than repealing the cap entirely, this proposed fix “still is quite regressive.”
David Sirota, columnist for Sanders, was a former adviser to Sanders. He compared Democratic efforts for SALT relief with the “Repubicans’ estate tax lie.”
“The GOP dishonestly depicted estate tax cuts for billionaires as a way to help farmers,” Sirota said in an email. “Democrats are dishonestly portraying SALT tax breaks that mostly benefit the wealthy as a way to help the middle class. In reality, Democrats are using odes to the middle class as a veneer to pass giant tax breaks for their big donors.”
Gleckman agreed with Suozzi’s argument that the SALT cap disproportionately hurt high earners in high-tax states, but added, “It’s important to keep in mind that even people in New York and high-tax blue states got a tax cut from the Tax Cuts and Jobs Act. We’re not talking about some punitive tax on upper-middle-income people in high-tax states. They actually got a tax cut — it just wasn’t as big as some other people got.”
Suozzi has been pressing for a complete repeal of the cap for months. This would cost taxpayers approximately $85 billion each year, according the nonpartisan Committee for a Responsible Federal Budget (CFRB). The left-leaning CFRB believes that 86% of benefits would be given to the richest 5% if the cap were completely repealed. Institute on Taxation and Economic Policy(ITEP) and only 4% of the benefits would flow down to the bottom 80%, according the left-leaning Center on Budget and Policy Priorities.
Concerned about the optics of a tax cut for the rich in Biden’s signature spending proposal, Schumer floated a proposal to suspend the cap for five years — which would cost the government more than any other specific measure in Biden’s proposal, according to the CRFB.
“The bill would do more for the super-rich than it does for climate change, child care or preschool,” warned Jason Furman, who served as former Barack Obama’s top economic adviser. “That’s obscene.”
Malinowski and Rep. Katie Porter of California, a fan favorite, presented a different compromise that would increase the cap from $10,000 up to $72,500. The House Democrats eventually agreed to an amendmentThe cap would be increased from $10,000 to $80,000 by 2030, and the $10,000 cap would be reinstated in 2031. (Gottheimer has essentially admitted that the reinstatement is likely a fake, saying, “I think it’s pretty clear when they get tax relief it’s going to be hard to take that back.”)
The value of the increase from $72,500 to $80,000 is “larger than the entire Child Tax Credit expansion for a middle-class family with two children,” Furman observed.
“This increase alone will go almost exclusively to households making over $1 million,” he tweeted. “Why are they doing this?”
A Tax Policy Center analysisBased on a similar proposal, only 1.6% of middle-class families with incomes between $54,000 to $96,000 would be eligible for any benefit. The average middle-income family would get a tax break of $20. Half of the benefits would go for households with incomes between $254,000-$366,000. While the compromise still caps the potential tax savings for the country’s top earners, the top 0.1% would see an average tax cut of about $16,000.
Some media outlets offer this service. reportedAlthough Democrats were open to expanding the alternative tax to reduce the windfall of the tax break for the rich, one House Democrat familiarized with those discussions stated that Democrats were still considering it. SalonThat proposal has been presented. The Trump tax cuts have been repealed, but Democrats plan to include a surtax of millionaires, a minimum corporate and increased IRS enforcement.
Suozzi said he’s not a fan of the current proposal but will support it as part of Biden’s agenda.
“I would much prefer a full repeal, which is what I’ve been advocating for since the beginning,” he said. “But I’m willing to support this because there are a lot of other things in the Build Back Better agenda that I also support, like addressing climate change, lifting children out of poverty and a whole host of other progressive policies that I want to see get done. … I’m willing to compromise,” he said, because the overall package “will be a big victory” for the middle class and unions.
But Suozzi’s argument has not won over enough Democrats to pass in the Senate.
“This bill should invest in our families and our future — not provide giveaways for the wealthy few,” tweeted Sen. Michael Bennet, D-Colo. “The House’s SALT proposal cuts taxes for millionaires and billionaires on the backs of low-income and middle-income families. We should fix this in the Senate.”
Some left-leaning economists have supported a plan being developed in the Senate.
“The good news is that the House Dems seem to have backed away from fully repealing the SALT cap, which would have been a huge tax break mainly going to the richest 1%,” said Steve Wamhoff, the director of federal policy at ITEP. He favors a proposal by Sanders and Sen. Bob Menendez of New Jersey that “would cost less and it would provide very little to the richest one percent.”
In a statement, Sanders said that he believes the $10,000 cap is “much too low” but added that “multimillionaires and billionaires who own mansions in exclusive neighborhoods, and who can afford to make extremely expensive purchases, do not need a tax break.” His proposed plan with Menendez would lift the cap entirely, but only on those earning between $400,000 and $550,000.
In a news conference last week, Sanders said the House proposal was “not an acceptable compromise” because 37% of the benefits would go to the top 1%. “At a time when Democrats are correctly demanding that the wealthy finally pay their fair share of taxes,” he said, “it would be absurd and hypocritical to provide the richest people in the country with a massive tax break.”
For his part, Suozzi said he won’t back the Senate proposal. “It creates a cliff,” he said. “If somebody makes $400,000 a year it’s okay but if they make $401,000 per year that doesn’t make sense and I disagree with the policy.”
This relatively abstruse House-Senate beef underscores the “difficult spot” the Democrats find themselves in during the final stretch of Build Back Better negotiations, Gleckman said, as popular proposals like paid family leave have been set aside due to cost concerns.
“We’re in a situation now,” he said, “where many of the tax dedications that we used to think of as middle-class or middle-income, like the mortgage interest deduction and charitable deduction, are really only for rich people because almost nobody itemizes [tax returns]It’s not. So what you’re really talking about here is playing around with the tax bills of people who are in the top 10%.”
This entire fight is about the party leadership’s need to “satisfy a relatively small number of Democrats,” he said. “Anything they do just to address the SALT cap is going to be extraordinarily regressive.”
