From Former Quigley Supporter:
Assault on Tax Cuts and Jobs Act Underwood Assembles Comments from Democratic Elected Leaders in District to Speak to Alleged Hardships of SALT Deductions Cap
Congresswoman Lauren Underwood issued a press release today (7/17) touting her support for House Joint Resolution 72, which is Congress’ protest to a June 13 IRS ruling concerning contributions for state or local tax credits.
HJRes72 is Congress’ way of formally telling the Treasury Department and the IRS that it disapproves of the ruling.
The resolution, sponsored by Congresswoman Mikie Sherrill (D, NJ) with 48 congressional co-sponsors, includes Congressman Sean Casten and Underwood.
With the exception of Congressman Peter King (R, NY), all of the co-sponsors are Democrats.
The resolution has been assigned to the House Ways and Means Committee.
Underwood used the July 16 filing of the resolution to renew a push for her legislation, H.R. 1757 which is one of many pieces of legislation which seeks to dismantle the Tax Cuts and Jobs Act (TCJA) of 2017 by raising the state and local tax deduction cap from the current $10,000 that was implemented to help pay for TCJA, to higher limits.
Underwood and Casten both maintain this is to help the middle class.
In Underwood’s Wednesday press release, stated with emphasis added:
“Middle class families in the 14th District of Illinois are being double-taxed due to changes in the state and local tax deduction from the Republican tax law, all so the one percent and big corporations can get a tax break they don’t need,”
Double taxation is illegal!
Given the litigation several states attempted to strike down SALT limitations filed and dismissed since TCJA was implemented, the courts have made it clear there is no double taxation taking place in TCJA, including the SALT deduction cap.
This is deliberate language to draw a wedge with the lie that the TCJA cheated middle class families.
That is dead wrong.
The truth is the roaring economy Americans have enjoyed was due to the TCJA which gave businesses a greater incentive to invest and to hire.
The TCJA also lowered tax rates, and federal withholding on everyone’s paychecks.
Underwood tries to advance her claim using the same approach the Democrats used in a June 25 House Ways and Means subcommittee hearing, to tell about alleged hardships caused by the SALT deduction cap of TCJA.
In opening the hearing, the Subcommittee Chairman Mike Thompson (D, CA) stated the hearing’s purpose was to hear testimony:
“…how recent limitations to the SALT deduction harm communities, schools, first responders and housing values.”
The subcommittee heard testimony from local government witnesses including the mayors of Falls Church, VA and Bayville, NY; the commissioner of Berks County, PA; the school superintendent of Upper Arlington, OH; and the president of the Professional Firefighters of WI.
Underwood’s press release uses a similar approach, using elected officials from jurisdictions within the 14th district. they are:
- Jack Franks (D), McHenry County Board Chairman
- Larry Walsh (D), Will County Board Executive
- Sandy Hart (D), Lake County Board Chair
- Richard Irvin, Aurora Mayor
- Ray Rogina, St. Charles Mayor
- Denise Winfrey (D), Will County Board Speaker
- John Wasik (D), Lake County Board Member
Given 5 out of the 7 elected officials cited were elected as Democrats reveals a one-sided point-of-view already.
But the 14th district includes 7 counties, but only 4 are represented among Underwood’s chosen elected officials.
What about DuPage, DeKalb and Kendall counties (the Aurora mayor has constituents in 2 of those counties, he lives in Kane County).
Since Lake, McHenry and Will Counties had their elected county board chairs/executives, where were their counterparts from DuPage, Kane, Kendall and DeKalb counties?
Wouldn’t Underwood received consistent inputs from DuPage County Board Chairman Dan Cronin (R), Kane County Board Chairman Chris Lauzen (R), Kendall County Board Chairman Scott Gryder (R) or DeKalb County Board Chairman Mark Pietrowski (D)? Did she even ask them?
Or would it be a case of telling the truth about Underwood’s legislation on SALT deduction cap?
Here is Jack Franks’ quote from Underwood’s press release:
“The tax law, which was touted as good for the middle class, has instead been harmful to my constituents, who shoulder one of the highest property tax burdens in the nation. The SALT cap increases federal taxes on a large percentage of our homeowners, and hurts them not once, but twice, because it also devalues their homes and makes them harder to sell. As a result, McHenry County, which at one time was one of the fastest-growing counties in the nation, instead may end up with a net loss of population for the first time. I respectfully request Congress to pass H.R. 1757 to correct this unintended consequence, and deliver relief to hard-working McHenry County families.”
No Chairman Franks, accepting your assertion of highest property tax burden at face value, the reasons your constituents are burdened by higher taxes is due to what has been done in Springfield in recent years, including this past spring.
Whether it’s a 32% increase in the state income tax rate, to a plethora of higher taxes and user fees, Illinois residents are already overburdened by increased taxes.
Chairman Franks served 9 terms in Springfield, and was a part of the Democratic majority who expanded government services to such a point, that the loss of population is on Franks’ hands, not on SALT limitations of TCJA, due to the higher tax burdens at the sate level.
Given Franks’ counterparts in DuPage and Kane Counties served with him in Springfield in the General Assembly for over a decade each, they knew the truth of why suburban taxpayers are overburdened with high taxes.
The other six local leaders Underwood quoted gave similar deceptive statements like Chairman Franks in the press release.
The reason Franks’ and the others are deceptive is because it denies the whole truth of federal taxation on all income levels, and the fact the change Underwood is talking about will only benefit the wealthy, and not bring one time of tax relief to working families.
On June 25, an additional witness before the subcommittee was Nicole Kaeding, the vice president of federal and special projects at the Tax Foundation. Here is a brief excerpt of her testimony that day:
“Even those impacted by the SALT cap often saw a net tax decrease.
“First, they often were previously impacted by prior implicit SALT limitations, such as the AMT [alternative minimum tax] and the Pease limitation [limitations for itemized deductions], which were repealed by the TCJA.
“Second, some quit itemizing their deductions, switching to the expanded standard deduction.
“Filers also benefit from lower rates and the expanded child tax credit, among other changes.
“To the small group of individuals with net tax increases, an estimated 6.5 percent in 2018, it is unlikely that the tax increase is solely due to the SALT cap.
“It is often due to interactions with other provisions, such as the repeal of personal exemptions.
“The deduction cap is frequently cited as impacting state budgets; however, its impact is overstated.
“States saw an increase in revenue from tax reform, due to their conformity to the federal tax code.
“State and local governments have also explored and passed tax increases since the passage of the new SALT cap.”
Note that last sentence about governments exploring and passing tax increases since the end of 2017.
In Illinois, we know that all first hand, many of which couldn’t be written off by middle class taxpayers to begin with, like gasoline taxes, cigarette taxes, and increased vehicle registration fees, among others, and Underwood’s legislation does not change current law that those tax increases cannot be deducted on federal tax returns.
And then there is the prospect of the graduated income tax, if passed by voters next year.
The Tax Foundation’s analysis can be viewed in the link below.
The nonpartisan Joint Committee on Taxation gives similar analytics, and it is linked in the Bloomberg article below.
But look at something else Ms. Kaeding said,
“To the small group of individuals with net tax increases, an estimated 6.5 percent in 2018, it is unlikely that the tax increase is solely due to the SALT cap.” (emphasis added)
Given the 6.5% cited, what about the other 93.5% of taxpayers?
The constituencies represented by Underwood’s leaders cannot all be in the 6.5%, could they?
Finally, Congressman Casten testified before the same subcommittee on June 25, but after the witnesses had given their testimonies and questioned by the subcommittee.
Casten admitted the following:
“I agree we’ve got to pay for it and that’s fine, but since this exists to partially pay for an unnecessary tax cut, I think we have plenty of room to figure out how to pay for that cost.”
Casten admitted that Underwood’s legislation does not pay for the proposed raises in SALT deduction caps.
He reaches for vaporware to pay for the nearly $600 billion to pay for the Underwood legislation.
Maybe Underwood and Casten should go figure out how to pay for the .HR. 1757 legislation, or any other changes to TCJA, while keeping in mind you are addressing tax relief for 6.5% of tax filers, overwhelmingly upper income taxpayers.
- Underwood press release link: https://underwood.house.gov/media/press-releases/underwood-continues-fight-middle-class-tax-relief-joins-bipartisan-resolution
- H.J. – Resolution 72: https://www.congress.gov/bill/116th-congress/house-joint-resolution/72/text
- H.R. 1757: https://www.congress.gov/bill/116th-congress/house-bill/1757/text
- C-SPAN 6/25 Subcommittee hearing: https://www.c-span.org/video/?462072-1/ways-means-committee-examines-limits-state-local-tax-deductions
- Bloomberg JCT article: https://www.bloomberg.com/news/articles/2019-06-24/salt-cap-repeal-would-be-40-billion-windfall-for-millionaires
- Bloomberg 6/25 article: https://www.bloomberg.com/news/articles/2019-06-25/salt-cap-spurs-squabbles-over-which-party-cares-for-middle-class
- Tax Foundation Testimony: https://taxfoundation.org/salt-deduction-cap-testimony-2019
- Casten 6/25 testimony: https://casten.house.gov/media/press-releases/casten-continues-push-salt-deduction-fix-help-middle-class-families