The so-called Heroes Act — allegedly meant to stanch the financial hemorrhaging caused by the lock down intended to curb the spread of the coronavirus and being pushed by House Democrats — has more ornaments than a Christmas tree.
Among other things, if passed, the bill would extend the $600 a week unemployment bonus through the end of the year, paying those thrown out of work by the government-imposed business shutdowns more to stay home than to return to work, incentivizing prolonged joblessness.
It also would bailout state and local governments, even those whose financial problems predated the coronavirus pandemic. It would forgive students, even for those capable of making repayments. It also would bailout the Postal Service.
Perhaps the most egregious aspect, again, is the proposed repeal of the $10,000 cap on IRS deductions for state and local taxes (SALT) that was part of the Tax Cuts and Jobs Act passed in December 2017.
According to the Tax Policy Center, three-quarters of any benefit from repealing the SALT deduction cap would go to households making $153,000 or more. The top 1 percent of households, those making $755,000 or more, would receive more than 56 percent of the benefit. The Center calculated repeal would cut federal tax revenues by $620 billion over the coming decade.
More importantly, the SALT cap stops forcing the residents of low-tax states like Nevada from subsidizing high-tax states like New York and California. Prior to the cap Nevadans were able to deduct about 1 percent or less of their adjusted gross income, while those in high-tax states could deduct more than 5 percent.
Calculated on a per capita basis using 2010 tax data, Californians claimed $2,116 in federal income tax deductions, while Nevadans claimed only $166 per person for sales tax deductions.
If the Heroes Act passes, Nevadans would again be paying a disproportionately higher proportion of federal taxes. This has nothing to do with remedying the woes created by the virus panic. It is just another sop to Democratically-controlled, big spending states.