Kevin Dayaratna, The Heritage Foundation: Getting Salty About the SALT Deduction
Kevin Dayaratna, a senior statistician with The Heritage Foundation, joins the show to talk about why cutting tax deductions is a good deal for taxpayers.
Republicans in Congress and President Trump have released frameworks for pro-growth tax reform, reducing marginal tax rates and making federal taxes fairer and simpler. One politically popular deduction, though, has everyone getting salty: the State and Local Tax (SALT) deduction.Kevin Dayaratna, a senior statistician with The Heritage Foundation’s Institute for Economic Freedom and Opportunity, joins the show to talk about why cutting SALT is a good deal for taxpayers.
By allowing taxpayers to deduct state and local tax payments from their federal tax liabilities, Dayaratna says the federal government is essentially subsidizing high-tax states at the expense of everyone else. The SALT deduction encourages local and state lawmakers to increase spending and taxes, by spreading the wealth around the nation and forcing everyone to pay higher tax rates to offset the deduction’s costs.
Just eliminating the state and local tax deductions, and other deduction giveaways, would generate an estimated $1.669 trillion in revenues, over the next 10 years. Federal tax burdens could be relieved by up to 16.4 percent, Dayaratna says, allowing people everyone to keep more of their hard-earned money.