Amid government orders shutting down employment, more than 30 million people in the United States have lost their jobs. Entire industries are months, if not weeks, away from permanent collapse. Disproportionately hurt are low-income workers, more than half of whom report having someone in their household lose a job or take a pay cut as a result of the coronavirus. Nearly 2 in 5 lower-income earners say someone in their household has lost a job outright, and fewer than 1 in 4 have at least a three-month rainy day fund.
In evaluating our spending and reopening measures, these are the workers and families we must prioritize. After all, higher-income earners are the ones who can disproportionately work from home and already have ample savings. Yet House Speaker Nancy Pelosi has prioritized giving the wealthy a tax cut in the form of a temporary elimination of the state and local tax deduction cap.
As you may recall, President Trump didn’t eliminate the SALT dedication but instead capped it at $10,000. SALT allowed high-income earners to pawn off part their state and local tax burden to lower-income workers in red states. A removal of this cap would almost solely benefit the top quintile of earners. More than half of the benefit would go to the much-reviled “1%.”
State and local governments have innovated as much as possible to keep businesses and supply chains open, but the onus of keeping cash flows alive and rents paid has fallen on the federal government, which has publicly called to keep shutdowns. This had led even the most stringent of deficit hawks, such as Justin Amash, to back direct cash payments to workers. Plenty of Tea Party conservatives have supported lifelines to businesses.
It is in this context that Pelosi decided once again to capitalize on a crisis and use the worst job market in recorded history to sneak in a tax benefit for San Francisco trophy wives and hedge fund managers hiding in the Hamptons. As someone who is definitely not Rahm Emanuel once said, never let a crisis go to waste.
