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.
 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ElTerco's picture

Republican game plan: squeeze more out of the middle class and funnel directly to the wealthy.
Democratic game plan: squeeze more out of the middle class and funnel directly to the poor, especially welfare/unemployed.

The gas tax Cohn suggests is just a kicker for shits and giggles to screw them as they commute to/from work.

BTW The middle class is that subset of people that actually does real work rather than sit on their ass or jawbone all day.

techpriest's picture

Republican game plan: squeeze more out of the middle class and funnel directly to the wealthy.
Democratic game plan: squeeze more out of the middle class and funnel indirectly to the wealthy, using the poor as a pass-through entity.

TheLastTrump's picture

BOOM! Carlos Slim TracFones, Pepsi/KFC/MickeyD's, section 8, Obamacare free medical for illegals/poor.....prices doubled....it's a giveaway to the connected...

 

>>> funnel indirectly to the wealthy, using the poor as a pass-through entity.

Zorba's idea's picture

I fully expect that the net,net,net results of this faux Tax Reform will be the usual, customary and reasonable BOHICA for America's middle class and small business. There is only one solution...Primary all the incumbents, prevent the Selectors from anointing the next class of CONgressional whores. Nominate a respected regular Joe or Mary that hasn't any of the usual pedigree the deepstaters prefer...Only the school of Hard Knocks most "Flyovers" are well qualified by.

Rex Andrus's picture

We want your money...

Squid Viscous's picture

Cohn comes from a long line of mohels..."just the tip, I promise!"

BigWillyStyle887's picture

Why dont they make cuts somewhere in the budget to pay for the fucking tax breaks? What ever happened to eliminating government waste and fraud along with entire departments?

 

Do they think we forgot about that or was it bullshit the entire fucking time??????????????

ffed's picture

Part 2!!! This one IS SHORT AND SWEET!!! LOL   of gab.ai CENSORSHIP this one SEEMS VERY MUCH like they do not like what I have to say but who knows?????

https://www.youtube.com/watch?v=12QWEl6fHsg&feature=youtu.be

TheLastTrump's picture

Fuck you AND your O/T anti GAB spam comments on every thread.

affirmed_78's picture

Just eliminate all deductions, including the standard deduction, and drastically lower the tax rates.  Itemized deductions in particular are just a way to scam the system.

Quivering Lip's picture

This is Goldman at its best, fucking over everyone so that corporations can pay less than they already pay, which is no where close to 39%. Take away SALT which is not a deduction but TAXES you have already paid is a joke. It really just leads to a bigger FEDERAL government something I thought Republicans where against. 

If Republicans want to piss off their base (maybe turning thouse RED states BLUE) in "RED" states in affluent areas with high property taxes and "RED" states with income tax taking away SALT would probably do it.

ElTerco's picture

The current effective corporate tax rate for the "average" company is less than 15% due to deductions and write offs.

This new scheme is really all about the "passthrough" provision to allow extremely wealthy individuals to lower their taxes, but they are trying to hide that fact with all the other smoke and mirrors in the plan.

TheLastTrump's picture

says above, small business passthrough rate

ElTerco's picture

Yeah, but it has absolutely nothing to do with middle class tax cuts like they keep saying. The middle class is going to get screwed. The middle class will get all of the debts and a piddlance of the income, if not a clear loss of income from higher taxes.

geo_w's picture

It's the dem states that will feel the pain if SALT is removed. So not seeing a lot of incentive.

Old Poor Richard's picture

Republicans live in majority Dem states.  Either Trump is a populist or he's a globalist.  This is bigger than partisan bullshit.  It is pro-Soros, anti-populist to take away the deduction for money robbed from you by the government, tax you on income you never get to see.  Worse even than the death tax--with the death tax you can't owe more than you have, unlike the case where you owe federal tax after state and local govt took 100% of your earnings already.  Only Darth Vader and globalist neocons could be so bold.

affirmed_78's picture

Here's the thing with taxes:  at the end of the day, we don't balance our budget anyways.  We have over $20T in debt with no chance of repaying it, barring drastic tax hikes and the resulting social incohesion.  So in effect, taxes just offset some of the dilution of the dollar, as all excess spending is monetized by the Fed anyways.  

ElTerco's picture

The wealthy have endured much higher taxes in the past with no social incohesion. The reason is that at the end of the day, wealthy people have more money than they know what to do with, and their lifestyle doesn't change if they can't achieve that high trophy number they strive for. On the other hand, those who make lower wages have to struggle significantly harder when their wages get diverted for the purpose of some asshole hitting their trophy number.

Also, look at the national debt increase since 1983 and look at a chart of income gains for each quintile or decile of the population since 1983. That debt is a loan, and the people who took out the loan (aka the ones that got the money) are the ones who should have to pay down their loan in proportion to how much they got.

Zorba's idea's picture

Peel the FED's Tax Labyrinth "Onion" all the way to the heart of problem and you'll find our nations rotten stinking fiat. Our denigrated currency is the most destructive force that is incinerating the pursuit of Life, Liberty, and Happiness. All past, present, and future tax reforms are futile exercises for average American's...Like trying to make chicken salad out of chicken shit. End the FEDERAL RESERVEless Tyrrany.

pizdowitz's picture

The intent for elimination of SALT is very clear: to push people en masse into renting, and then, of course, preferrably in the metropolitan areas owned by the sponsors of that "Law". If you are paying $2k a month now, get ready for $20k after that.

This POS may not pass, as the Realtor Assoc will certainly scream murder, but the writing is on the wall. In a very large font.

Check out the Sustainable Development Agenda 21. All these lofty intents, that the "forward-thinkers-mother-Earth-lovers-Malthusian-perverts" are getting so mouth-foaming psychotic about, like Sanders and the rest of the Commies, mean only one thing : the State will be the exclusive executioner, once the intents have been beaten into laws.

The biggest bummer will be a total elimination of private property by private persons, and especially the white supremacists, generic inbred haters, toxic masculinity Alphas, etc. Only virtual "persons", i.e. corporations and generic no-gender Omegas, will be allowed to own property of any kind - including phones, websites, farms, water wells, etc. No even Orwell could have invented more genocidal, holocaustic garbage..

http://www.un.org/sustainabledevelopment/sustainable-development-goals/  

(issued on Oct 12, 2017)

 

 

Old Poor Richard's picture

THANK YOU!  Yes, this is the globalist agenda, wrapped in a bow like it's a Republican plan when really it's a Soros-inspired conspiracy.  Redstate retards eat up this George Soros Euro anti-property rights scheme like it's candy, thinking they're stabbing people who live in California and New York.  Republicans live in these states, too.  Idiots.

Bernie Madolf's picture

Aren't they doubling the standard deduction?

That should offset salt deduction for all but the top ~5% of earners but top bracket reduction should give top earners a net gain regardless.

This is Much Ado About Nothing.

I will say it again... There will be no significant changes to the tax code just some cosmetic changes to declare victory.

Middle Class employees will probably pay more and employers less but offset by rising wage expenses

Cardinal Fang's picture

It's just a shell game.

To see how many feathers can be plucked without killing the chicken.

The tax code is the fundamental source of power for D.C. Politicians of both stripes.

You, the taxpayer, are never going to get a break.

Never.

Lost in translation's picture

Cardinal Fang for US Senator!

Finally, someone telling the US taxpayer the truth.

aardvarkk's picture

Well, except for those of us who are old enough to remember the LAST tax break going into effect.  It was very nice.  The next one will be too, I would imagine.

 

adr's picture

Raise the capital gains tax and place a $1 tax on all futures and stock trades. If Wall St complains, tell them to move to London or Hong Kong. 

End the EIC and drop income taxes to 10% flat on all earned income. 

Punish speculation and reward labor. It's the only way forward. 

Lost in translation's picture

Collapse.  It's the only way forward.

FIFY

QQQBall's picture

adr, brillaint moar taxes. Are you retarded or just stoopid? FFS!

 

ElTerco's picture

The only way to pay down the debt is taxes. Let me repeat that: Taxes are the *only* way to pay down the debt. Let that sink in.

The only alternative to paying down the debt is collapse or default, which will effectively be the same thing.

FreeNewEnergy's picture

There was once a board game called Lie, Cheat, and Steal, in which all of those activities were allowed by rule. A bunch of us used to play and drink, smoke weed and the winner was always the one guy with the law degree.

Tells you much about the "legal system" in this country. Corrupt to the very core.

My adivce is to shed all you've been taught about being fair, ethical, etc. Take back your lives by doing to htem what they do to you before they do it.

Calls for serious life adjustments, but I basically dropped out around 1999, and haven't done bad. Currently, still in NY state because of connections here, it's far better to be a corporation than an individual, so, I'm incorporating on January 3 of 2018.

You have to play hardball to beat them at their own game, but it can be done if one is persistent and doesn't mind bending some rules.

Of course, significant jail time is always on the agenda, but, if the government - at any level - wants to set you up, they can and will, so what difference - at this point - does it make?

h/t to Hillary C. (stands for Cunt)

QQQBall's picture

Chump could save $100MM by not bombing empty airfields in the Syrian desert.

 

Look just THROW THEM ALL OUT. EVERY LAST ONE OF THEM. and BTw, stop the practice of them selling shit tax free when they enter gubbermint service. So how much after-tax did Cohn make for his 10+ months in "service"?

ipso_facto's picture

'...California want to provide world class schools...'

California schools are last in the nation (which is no surprise since noone speaks English anymore.)  Catch A Wave!

Rex Andrus's picture

Better demolish the interstates out of Moonbeam Country.

Herdee's picture

They'll monetize the national debt with more QE, guaranteed.  You can't stimulate the economy through increasing taxes.  The more that goes to government, the less goes to the private sector.  Right now spending is out of control and at this pace you are looking at trillion dollar deficits going forward.  Everyone including the President who tells everyone how great the economy is, is preaching a pack of lies and bullshit which is government propaganda. To put it plainly, they're all full of shit.  The true unemployment tate is over 23% and the Velocity of M2 is still falling and the yield curve is coming close to flattening out. People are still not spending they are watching their money tightly:

https://fred.stlouisfed.org/series/M2V

 

King of Ruperts Land's picture

The best way to stimulate the economy would be to shock it. Let the markets crash and the bubbles pop. Force bankruptcy sales and take away the safety nets while removing all drag on hiring and creating new business.

Putting more funny money into the asset bubbles, giving free money so under performing asset holders can hang on and paying welfare for people to not work, does not contribute to a real economy.

The real solution is dynamite not QE forever band aides. You will know you are squeezing hard enough when its raining wall street bankers.

King of Ruperts Land's picture

I am loathe to "carbon" taxes as they pay tribute to the greeny fraud. However, "energy" taxes, if a part of lowering, (and eventually eliminating) "income" taxes are a great idea. Energy is so useful and profitable and if we want to tax fossil fuel and not wind and solar, do it because fossil energy is so wonderful we should conserve it.

We must reduce spending though. Look what Russia spends on defense and weapons. We should cut out 80% of Government. Figure out what to do with retirees and the old and sick. Sorry everyone will take a haircut, but that doesn't have to be the end of the world with America great again.

Many of the Assholes responsible for why America is in the shitter right now will have to go bankrupt.

pizdowitz's picture

Anyone with a stone-cold face, and flapping his arms around is a devoted Priest of Reason, and unpaid troll.
Paid trolls always smile slavishly, like snakes, or insurance salemen.

saldulilem's picture

Pearl, I talked to my doctor about you yesterday, and he agrees with me you've got to cut down on the salt.

pizdowitz's picture

Pearl, you are a diamond. Do not listen to either. Salt is a very necessary electrolyte to make sure your synapses are firing "on all cylinders".

whatswhat1@yahoo.com's picture

First, by allowing taxpayers the ability to deduct state and local taxes (SALT), taxpayers avoid being taxed twice on the same income. Additionally, the deduction on property taxes, along with deduction on mortgage interest, provides a strong incentive for homeownership.

Old Poor Richard's picture

Taxed twice?  Not just that, taxed at an infinite tax rate!  If you give the money to state and local taxes, you never had the money, like you didn't even earn it.  Why in the world should you pay federal tax on money you never saw??????   The end game is that if state and local taxes absorb 100% of your income, then the feds are taxing you 20% on some amount you never saw, so your net income for the year is negative however much you owe in federal tax.  That's insanity.  How can asshole Republicans think this is even remotely reasonable?  Just spiteful, evil conspiracy.  Any money that the government at any level absorbs in taxes should be an exemptiion, not just a deduction, so you get to exempt it and then still get the standard deduction.  Opposite of the evil Republican plan.