Gary Cohn Says Cutting SALT Deduction Will Be A Part Of Republican Tax Reform Plan

Tyler Durden's picture

In the latest sign that the Trump administration is standing by one of the most controversial elements of its tax-reform program over the vociferous objections of blue-state Republicans in the House and Senate, Gary Cohn reportedly played down the impact of eliminating the deduction for state and local taxes - known as the SALT deduction - during a meeting with a partisan group of lawmakers, according to Politico Playbook.

Cohn met with the Problem Solvers caucus on the Hill this morning to discuss the administration’s tax reform agenda. Sources told Politico that Cohn said the proposed elimination of the SALT deduction would remain in the final bill, and furthermore, that it would probably be less controversial than the administration’s plan to reduce the “pass through” rate - the rate at which many small businesses are taxed - to 25%.

Cohn's remarks are the latest sign that the tax-reform bill's architects have yet to reach an agreement on several key issues. As Bloomberg reported last night, Rep. Peter Roskam, a key House lawmaker on taxes, said it’s important to him that Congress reach a compromise on state and local tax deductions, rather than repealing it altogether. And a large group of blue-state Republicans appear to be backing him up. Since blue states tend to have higher local taxes, some Republicans claim the bill unfairly targets Americans based on where they live.

Roskam, chairman of the Ways and Means tax policy subcommittee, said Republicans are closer to a decision on the so-called SALT deduction, but it’s still unclear to him how the full committee will treat the tax break.

The uncertainty over SALT, which is one of the few revenue boosters in the nine-page Trump tax plan outline, is believed to be one of the most divisive elements of the Trump plan, though the administration has struggled to find a suitable alternative that would similarly reduce the impact on the deficit. Treasury Secretary Steven Mnuchin has also criticized the SALT deduction as an example of the federal government unfairly subsidizing the states.

Right now, lawmakers are trying to find a way to keep tax reform from adding $1.5 trillion to the budget deficit over the coming ten years.

Cohn’s remarks highlighted the considerable uncertainty surrounding what the final tax-reform bill will look like. And to be sure, the SALT deduction is hardly the only proposal for which Republicans involved with the process of writing the bill have given conflicting statements.

House Ways and Means Chairman Kevin Brady insisted Wednesday that changes to retirement savings are coming, despite President Donald Trump’s repeated promises this week that no changes would be made to the 401(k) tax-deferral process. A proposal circulating among House Republicans would impose new limits on the upfront tax break for 401(k) savings as a way of generating additional federal revenue to offset money lost by the rate cuts and other proposed changes.

These contradictions have helped validate suspicions that the likelihood of tax reform passing by year end is far from a certainty.
 

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venturen's picture

I live in NJ and don't see why other states should pay more for my outragous taxes

synergize's picture

You're also an IDIOT...

Government doesnt need any more tax revenues - they waste it anyhow.  I dont care about the deduction, we, the people, keep it and get to have some money back in our pockets.  Let them grow the damn deficit! 

macholatte's picture

 

SABOTAGE
Ryan, according to members of the Republican Study Committee (RSC), is planning to put together a spending deal that includes giving amnesty to the DACA illegal aliens, as Breitbart News reported.

http://www.breitbart.com/big-government/2017/10/25/paul-ryans-secret-amn...

Paul Ryan Tells Conservatives DACA Will Be Part Of Spending Deal
https://www.huffingtonpost.com/entry/paul-ryan-daca-omnibus-conservative...

gmrpeabody's picture

How about letting our elected officials pay for their own insurance coverage, like the rest of us, after they leave office. Save a bundle...

Escrava Isaura's picture

The conservative agenda, with some democrats help, is destroying America as we speak.

Trump: 401(k) has always been a great and popular middle class tax break that works.

401(k) is scam. I have no idea how people still fall for it.

 

SALT deductions. Another assault on the Americans, this time, on the people that voted for Trump, go figure.

SALT deduction helps state and local governments fund public services that provide widely shared benefits.  That’s because, with this deduction, higher-income filers are more willing to support state and local taxes.  Repealing the deduction would almost certainly make it harder for states and localities — many of which already face serious budget strains — to raise sufficient revenues in the coming years to fund K-12 and higher education, health care, and other services.

Trading SALT Deduction for High-Income Tax Cuts a Bad Deal for Most Americans

 

HockeyFool's picture

Quoting the HuffPo doesn't help your argument. Or your reputation.

scaleindependent's picture

Dude,

 

Why is Cohn pushing for SALT and pushing for a gas tax?

Guys, ask yourself why?

 

IMO, it has to do with the 0.01% (those making over a million dollars a year) giving themselves a yuge tax break and having someone else pay for this.

This someone else paying for this is YOU.

 

It's fucking simple.

Stuck on Zero's picture

Without SALT you're effectively paying tax on tax.  Cut the size of the f**ing government.

Escrava Isaura's picture

The problem is not government.

The problem is PRIVATE DEBT that is TWICE THE SIZE of the US government.

So now we have more money being destroyed by the people paying their debt then new credit being created. So, no credit or government investments, Americans are trapped in a death spiral.

Now smart ass, tell us your solution.

Or, are you too an empty bag?

 

The_Dude's picture

'The problem is not government.'

Congratulations!  Very few people can prove they are a complete idiot in 5 words or less...

bigkahuna's picture

Its a troll, but to your point...yeah.

asteroids's picture

From 1490 or so to 1917 or so is about 425 years. Citizens did not pay an income tax. The country went pretty far without one. From 1917 to 2017 is a hundred years. Your income taxes consume a hefty proportion of your gross. Are you really happy about this?

Escrava Isaura's picture

No. 

I favor sovereign money (Japan 1970’s) so the profit stays within the community, so no tax is needed. Unless people are holding the cash/getting too rich. Then, those people will be taxed.

Anyway, sovereign money can’t work in an industrial society. Industrial societies are too big. Global. And too complex. On an agrarian/localized commerce/society it can work.

 

TheVigilant1's picture

Who defines "too rich " ? I smell a jealous socialist.

Escrava Isaura's picture

Wall Street, Trump, Warren Buffett…………….

 

Anteater's picture

And Trump said he will sign it.

WINNING!! NADA!@!

Hal n back's picture

I did a quick calculation of a family of 5 2 wage earners combined 120k a year.

With the std ded doubling and expemptions going away, their taxable income goes from 76k to 86k a year.

The family also gets a small subsidy for obamacare.

anyway, if they can stay in the 12% tax bracket, they wil pay about the same tax.

if the gop does somethign stupid like putting the 25% tax bracket at say 50 or even 75k, a lot of people are really gonna be pissed and wil prve Schumer right.

 

but we do not know the tax brackets and until we do  this all cannot be evaluated.

so we shall see. they need the 25% bracket kicking  in at a high amount to make the middle class-if middel class is 125k, to offset  the  itemized  loses due to sate tax deduction and the tloss of exemption amount.

a family of five picks up 12k in std deduction but loses 2k on exemption.

this is beign set up to be one more lie coming from he WH and Congress.

scaleindependent's picture

It's their way of cost shifting the loss of U.S. Treasury revenue from the banksters to the middle class. The banksters will get 100 of thousands in tax cuts, the middle class will get a tax raise.

redmudhooch's picture

Breitbart is a Zionist rag.

ReturnOfDaMac's picture

He is a world class idiot!  Pay federal taxes on state taxes paid?  What kind of fucking idiot is this?

AGuy's picture

synergize: "Government doesnt need any more tax revenues - they waste it anyhow. I dont care about the deduction, we, the people, keep it and get to have some money back in our pockets. Let them grow the damn deficit!"

No new taxes or remove of deductions!

Article:"Right now, lawmakers are trying to find a way to keep tax reform from adding $1.5 trillion to the budget deficit over the coming ten years."

Thats easy! Cut the fracking federal spending ASAP!

MoreFreedom's picture

I disagree synergize.  The SALT deduction is a subsidy to big government states, at the expense of small government states.  You obviously want to keep your deduction, at the expense of putting everyone further into debt, including yourself; a moral failure on your part.  

What's idiotic, is a government whereby everyone uses government to steal from everyone else.  Venturen has the right morals here.  You've got the wrong ones.

NeedleDickTheBugFucker's picture

Peter Schiff provides the best rationale for why it's wrong to eliminate the SALT deduction and it has nothing to do with "subsidizing" the profligacy of high-tax states.  Why is it fair for the federal government to tax you on income that you never got to keep (i.e. paid out as state, local and property taxes)?

Skeptophrenic's picture

Who needs Schiff to see that eliminating the SALT deduction is arbitrary and capricious. Paying tax on tax is just plain stupid.

Hate to say it, but please, no more winning.

gatorengineer's picture

well said.  However, all taxes should be deductible.  I am guestimating that I pay at least 10k a year in taxes I dont get to write-off, gas tax, every utility bill is close to 20 percent tax, tolls alone cost me over 3k a year.

swmnguy's picture

Open an LLC.  Hold a yard sale every year and claim that as income on a Schedule C.  Then write off all that shit.

Any conservative can tell you we get more of what we subsidize and less of what we tax.  The tax codes overtly punish work and reward rent-seeking.  Therefore, the clever fellow finds a way to align his interests to those of the rent-seekers, not the workers.

Get yourself some rents to seek.

gatorengineer's picture

short answer is I have to do something I am getting eaten alive.....

Miffed Microbiologist's picture

Me too. If this goes through we may have to move to Washington state sooner than planned before Cali RE implodes from the effect.

Miffed

AGuy's picture

"Me too. If this goes through we may have to move to Washington state sooner than planned before Cali RE"

Washington State isn't much better. Perhaps no Income tax, but it has a hellofa sales tax, and property taxes are through the roof. It won't be too long before Washington state enacts an income tax. After all its leading the charge with the $15 min. Wage.

malek's picture

Actually the INTRODUCTION of the SALT deduction was arbitrary and capricious.

Just like the home mortgage interest deduction doesn't help the aspiring home owner but is a subsidiary for the banks,
the SALT is a subsidiary for irresponsible state spending and does _nothing_ to help the little guy, in the overall picture.

Throat-warbler Mangrove's picture

My state also only allows a $4000 dollar maximum deduction for federal taxes paid.  Paying taxes on taxes?  Noooooo problem.  /s

MoreFreedom's picture

The problem with Schiff's argument is that there is no fair tax.  And that's simply because government takes it from you via force.   You do get to keep most of your income. 

And what Schiff doesn't point out, is the SALT deduction is an incentive to use government to steal from others (in this case residents of high tax states not paying for their share of government, because it's essentially a subsidy to residents of high tax states). 

Getting rid of the SALT deduction, creates an incentive for states to tax less.  That alone is a good reason for eliminating that deduciton. 

Anon2017's picture

You are already paying income tax on the FICA taxes you never got to keep either.

junction's picture

The ultimate goal is a flat 50% tax for every salaried person earning under $100,000 a year. 

gatorengineer's picture

if it were 50 percent all in including healthcare, state, property, sales and gas tax, I would be all over that Tax cut. 

Umh's picture

By the time you add up local taxes, state taxes, federal taxes and your part of corporate taxes (added to the products and services you buy) 50% would be a reduction in taxes.

DennisR's picture

Because you already paid the tax. Removing SALT deductions means you will be taxed again at the Federal level.

Pasadena Phil's picture

Amazing how leeches like you refuse to grasp the essence of the problem. If you are so adamant about preserving your free cheese entitlement, move to a state that taxes you less. Then we will all be on the same page about out-of-control federal spending. End ALL deductions! It's the only way to arrive at fairness.

migra's picture

If republicans pass a tax increase they are fucking done.

gatorengineer's picture

It will be a cut for the bottom 50 percent in the form of getting a larger earned income credit check back, and it will be a cut for the 1 %.  The bracket from 51% to 99% sorry about your luck...

QQQBall's picture

They are FUCKING DONE ANYWAY. THROW THEM ALL OUT.

 

For 8 years they whined and sniveled abiut Obamacare. Then, when they came into power, had mo alternative and wuddnt even recind it.  The future is is a given, more taxes, more taxes on taxes and less deductions. 401Ks are tax deferred, they will lower the max limit on contributions, then at some future date they will raise the tax rate on withdrawls. They coming for it all.

Fuck Paul Ryan. Fuck Cohn. Fuck Chump, Obomber and the rest. You want change? THROW THEM ALL OUT - send a message

MoreFreedom's picture

Don't throw out the baby with the bath water QQQBall.  Something less than 15% of the GOP in Congress are members of either the Freedom Caucus or Liberty Caucus.  Those guys are interested in keeping the government within the confines of the Constitution, and your tax bill more like it was from 1776 thru about 1900: < 10% total Federal plus local combined.

If you throw out the wrong guys, it's just going to get worse, and you can be sure the RINOs are grooming new RINO candidates to run as "real conservatives" that do exactly what the RINOs have done: claim to be conservative and then vote otherwise. 

ReturnOfDaMac's picture

They want to tax you on payments made to state taxes!  Fucking ridiculous.

Bastiat's picture

If you are still in the middle class, they want to suck your blood until your head caves in.

techpriest's picture

Not the first time in history: A sign of a collapsing empire is that government cannot meet its bloated obligations, and instead of cutting the obligations, it increases taxes and debases the currency. It will call this process all sorts of things, but you see your paycheck is going less far.

At a certain point, taxes explode so high that people are starving, because the taxes are so high. At this point there is only rebellion or death, and then the empire ends.

It doesn't have to end this way, but mankind has made the same poor choices at the same junctures in history.

Pasadena Phil's picture

Wrong way to look at it. I live in CA myself and this puts a lot of pressure on CA (and other communist high-tax states) to cut back on spending. In fact, I think deducting any taxes paid is just an illusion to influence taxpayer behavior. You should be pissed off that you live in a high-tax state. I don't want to be subsidizing CA citizens when I move to AZ next year.

Socratic Dog's picture

I live in CA as well, and I doubt that this, or anything else for that matter, will have the slightest effect on spending here.  This place is lost.  Spending will only increase.  Even if the repubs got in somehow, it would still increase.