Analysis & Comment

Opinion | The Debate Over a Tax Deduction

To the Editor:

Re “Democrats Push a Tax Cut for the Rich” (editorial, April 26):

As a former tax lawyer, I have long opposed using tax deductions to implement social policy. However, I am not as certain as the editorial board that the deduction for state and local taxes (SALT) should be eliminated now.

The SALT deduction does favor the wealthy. But it also permits states more freedom to spend money on matters like public health and education. Those are items on which blue states — those at which the SALT limitation was aimed, explicitly — spend much more than those without income taxes.

While the editorial board suggests that the money that would be paid in additional taxes by eliminating SALT be used for direct support for state and local governments, it is by no means clear that this would happen.

Rather than repealing SALT — especially now, when the need to spend on public health and education is clearer than ever — the limit on the deduction might be raised, perhaps to $17,500 or $25,000 per household. That would benefit many truly middle-class taxpayers, and states that choose to care for their citizens.

Jonathan J. Margolis
Brookline, Mass.

To the Editor:

I read with dismay the editorial board’s argument for abolishing the SALT deduction entirely. According to the board, restoring the SALT deduction would amount to a “tax cut for the wealthy.” How is “wealthy” defined in the board’s view? The article cites a statistic that there would be a small benefit for families making between $100,000 and $200,000 per year, and a much larger benefit for families making over $1 million. What about the people in between?

The high-tax states that suffered from the SALT deduction cap are full of people like me, who make a six-figure income working in professional services and who can be said to live comfortably enough, but who are not “wealthy.” We don’t fly first class; I drive a 12-year-old car; we worry about bills and things like child care in these high cost-of-living states. The burden of our tax system falls heavily on us as it is, by taxing income much more highly than, say, capital gains, which is the real province of the so-called “rich.”

Ed Newlands
Morristown, N.J.

To the Editor:

Three cheers to the editorial board for calling for the elimination of the SALT deduction, and opposing those who seek to reinstitute it. The country cannot move forward until we stop protecting our own individual interests in favor of those that help the country as a whole.

Yes, eliminating the SALT deduction will be a tax primarily on the wealthy minority sorely needed to pay for programs to rebuild the country. The delegations promoting the reinstitution of SALT deductions are displaying a hypocrisy that will promote the disunity of our country that our president so sorely needs to heal.

Paul Taravella
Huntington, N.Y.

To the Editor:

I could not disagree more with the editorial on the SALT deduction cap. Although the return of the full SALT deduction would benefit some high-net-worth families, the impact would be far more profound on the many middle-class and senior-citizen homeowners who are disproportionally squeezed because they happen to live in a high-tax state.

Rather than thinking of the SALT deductions as a subsidy for the wealthy, I think a more accurate perspective is that the high-tax states are now subsidizing those that enjoy lower tax burdens.

As Democrats we are constantly bemoaning the ideological polarization of our country. By characterizing the SALT deduction cap as rich versus poor legislation, The Times perpetuates divisiveness and does a great disservice to its middle-class taxpayers.

Karen Dorn
Rye, N.Y.

To the Editor:

While I cannot disagree with the principle espoused in your editorial calling for the elimination of the state and local tax deduction rather than the repeal of the current limitation, you fail to take into the account the very real problem caused by the limitation: the exodus of taxpayers from high-tax states to low- or no-tax states.

While a state-income-tax-free state like Florida will always be attractive to mobile high earners, the loss of the SALT deduction has apparently become the final straw for many of them. The result is that the budgets of states that have chosen to provide significant government services suffer while the lower-benefit destination states are rewarded. That can only encourage a race to the bottom.

Ideally, we should eliminate all state and local income and real estate taxes, increase federal taxes, and fund states, municipalities and schools via per capita allocations from the federal budget. But failing that, we should stop capping the SALT deduction.

Samuel Reckford
Short Hills, N.J.

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