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Some people may be surprised to see Democrats fighting to expand a tax deduction for the wealthy. We are not.

It makes perfect sense, if you think about it.

The House Ways and Means Committee voted nearly along party lines to repeal a part of the 2017 Republican tax cut. But it wasnt the corporate-rate cut Democrats were targeting. It wasnt some imagined tax cut for corporate jets. Rather, Democrats passed a bill to scrap the cap on very-high-income individuals ability to deduct their state and local taxes on their federal tax returns.

The deduction for state and local taxes, or SALT, still exists. Republicans merely capped the deduction at $10,000. Since Republicans also doubled the standard deduction, this cap really only affects the uberwealthy. To repeat, after more than a decade of campaigning against "tax cuts for the rich," Democrats are now fighting tooth and nail for a special interest deduction that helps only the wealthy.

Democrats call their bill the Restoring Tax Fairness for States and Localities Act, but it should be titled, Expanding Tax Breaks for Wealthy White Suburban Democratic Voters Act. Expanding the deduction wont help most taxpayers in New York, California, or New Jersey. It will help only those whose incomes or property values are very high.

It is too simple to say that the deduction only benefits high-tax states, Nicole Kaeding at the Tax Foundation recently testified. It is better understood as benefiting high-income individuals, many of whom reside in high-tax jurisdictions with high housing values.

If the Democratic bill becomes law, it would not cut taxes for any families whose total deductible expenses, including state and local taxes, are below $24,000; those taxpayers will still take the standard deduction as current law allows. The Democratic bill would not cut taxes for anyone whose state and local income taxes add up to less than $10,000. In other words, this can in no way be mistaken for a middle-class tax cut.

Nearly all the benefit of repealing the SALT deduction cap goes to the wealthy. To be sure, Democrats plan to offset the revenue reduction by raising tax rates on the rich. But that is an odd one-two punch from the perspective of tax reform. To advocate for more tax loopholes but higher tax rates on everyone makes sense if you view the tax code as a way of forcing peoples behavior to change. On the other hand, lower rates and fewer loopholes are desirable if you want people to make decisions based on their personal preferences and economic reality.

There are politics at play here, of course. Democrats took the House in 2018 largely on the strength of places such as Orange County, California wealthy, high-tax suburbs with plenty of million-dollar homes. The Democrats feel they have to pay off the white-bread vote with some special tax breaks.

Its all very surprising if you believe the Democrats rhetoric. Its not surprising at all if you have been following their behavior.

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Democrats try to restore a tax cut for the rich - Washington Examiner