GOP offers taste of 2022 attack ads if Democrats approve tax cut for millionaires
The top Republican on the House Budget Committee offered an early look this week at the kind of attack ad that Democrats are sure to face ahead of the crucial midterm elections if they ignore progressives' warnings and keep a large tax cut for wealthy households in their Build Back Better package.
On Monday, Rep. Jason Smith (R-Mo.) shared a 60-second spot lampooning House Democrats' plan to raise the cap on state and local tax (SALT) deductions from $10,000 to $80,000 through 2026—a proposal that would predominantly benefit the rich. One recent analysis estimated that U.S. millionaires would receive an average tax cut of $16,760 from the provision.
The Missouri Republican's ad opens with a clip of President Joe Biden demanding in a speech before Congress that the "wealthiest 1% of Americans just begin to pay their fair share."
"Fair share? Let's talk about the wealthy's fair share in the Democrats' agenda," the ad's narrator interjects. "Let's talk about SALT... Basically, the Democrats' way of giving the rich a tax cut."
Washington Democrats rewrote their tax & spending bill to include a massive $270 billion tax break to the wealthy. Their plan also gives the wealthy government subsidies for homebuying, paid leave, luxury vehicles, Obamacare, and more.pic.twitter.com/6xknYLj0oO— Rep. Jason Smith (@Rep. Jason Smith) 1637604900
Smith's ad echoes recent—and, given their past support for massive tax handouts to the rich, cynical—attacks from the right-wing group Heritage Action and the Republican National Committee, messaging that came as no surprise to progressive commentators who've been warning that the SALT provision is both economically unjustifiable and politically toxic for Democrats.
"Democrats' SALT tax giveaway is handing Republicans a potent political weapon to crush Democrats in the 2022 midterm elections," The Daily Poster's David Sirota tweeted Monday, highlighting Smith's ad. "This is a preview of the campaign ad that Republicans are going to run all over the country if Democrats somehow insist on giving giant SALT tax breaks to a tiny handful of very rich people in affluent Democratic locales."
The SALT provision is the second most expensive component of the Build Back Better package that the House passed last week, with estimates indicating it would cost $285 billion over a five-year period. By comparison, the bill would invest just $235 billion in clean energy and climate resilience programs over five years.
Sen. Bernie Sanders (I-Vt.)—who has dubbed the SALT cap increase "bad politics" and "bad policy"—is leading an effort in the Senate to make the provision less favorable to wealthy households. Earlier this month, Sanders and Sen. Bob Menendez (D-N.J.) put forth a compromise proposal that would eliminate the SALT cap for households making less than $400,000 a year and phase the cap in for rich households.
"In terms of SALT, we must protect the middle class from high local and state taxes," Sanders said last week. "But we cannot provide 39% of the benefits to the top 1%—as is in the House bill. At a time of massive income inequality, we must increase taxes on the 1%, not give them huge tax breaks."
Millionaires don't need more money. \n\nThe rest of us do need more affordable healthcare, childcare, a green economy, universal Pre-K and extended tax cuts for the working poor and families with children. How is this even still a debate?https://www.dailyposter.com/sanders-tries-to-rescue-dems-from-a-gop-attack/\u00a0\u2026— Citizens for Tax Justice (@Citizens for Tax Justice) 1637699672
Steve Wamhoff of the Institute on Taxation and Economic Policy applauded the Sanders-Menendez plan and noted that "an earlier ITEP report examined this compromise and found that it costs less than a third as much as repealing the cap fully and is much less regressive."
"The SALT cap is the only significant provision of the 2017 Tax Cuts and Jobs Act that limits tax breaks for the rich," Wamhoff observed, referring to the GOP's notorious tax law. "To be sure, Republicans included this revenue-raising provision in their bill because it mainly takes tax breaks from people living in high-tax states, which are mostly 'blue' states. This is clearly not a sound way to make tax policy."
"But the answer cannot be to simply repeal the SALT cap, as many congressional Democrats propose," Wamhoff added. "Estimates from ITEP show that the majority of benefits from fully repealing the SALT cap would go to the richest 1%."
In an op-ed for The Guardian earlier this week, Sirota warned that approval of the SALT provision in its current form is "a dream scenario for Republicans" hoping to take back control of Congress:
Ahead of the 2022 elections, the Republican Party seems to sense the opportunity already.
Senator TimScott, the Republican from South Carolina, recently tweeted, "The Democrats' SALT tax deduction is almost exclusively a tax cut for the rich. They're out here yelling 'tax the rich' while crafting handouts for the wealthy behind closed doors."
In October, Senate Minority Leader Mitch McConnell criticized "Democrats' obsession with the so-called SALT cap," saying: "Even as our colleagues draft the biggest tax hikes in half a century, they cannot resist the concept of special tax cuts for high earners in blue states."
"There is still an opportunity for Senate Democrats to block the most egregious of these tax breaks," Sirota argued. "But if Democrats instead advance their current proposal, the Republican rhetoric is likely a preview of what's to come in 2022—a redux of some of the Tea Party's most effective attacks during the 2010 midterms."
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