EDITORIAL: Democrats plot to bring back handout for wealthy

Senate Democrats have passed a budget resolution calling for a $3.5 trillion spending blowout, the handiwork of socialist Bernie Sanders, who chairs the Budget Committee. Sen. Sanders’ plan calls for perhaps the largest expansion of federal power in the nation’s history, enlarging the dependent class and turning over wide swaths of the economy to central planners and Beltway functionaries.

Of this, Sen. Sanders and other Democrats proudly boast.

But buried deep in the bowels of this recipe for economic stagnation is a little nugget that they’d rather most voters didn’t know about. Despite regularly singing dirges from their dog-eared hymnal about forcing the rich to pay their “fair share” — whatever that means — the Senate budget blueprint hints that the final product will include a massive handout for the wealthy at the expense of the middle-and lower-income taxpayers with whom they claim to sympathize.

That handout would be a revival of the federal write-off for state and local taxes.

Democrats from high-tax states have been squealing about the issue for nearly four years, ever since the Trump tax reform of 2017 capped the deduction — previously unlimited — at $10,000. The tax break provided an incentive for big-spending politicians in deep-blue enclaves such as California, New York and Illinois to keep levies high by passing the costs onto the federal system in hopes of muting potential tax revolts.

The benefits of the deduction accrued disproportionately to the rich. The Tax Policy Center estimates that 90 percent of the savings went to the top 20 percent of wage earners. Full repeal of the cap would reduce federal revenue by $89 billion per year, a significant number even in Washington.

Of course if Democrats in New York — or elsewhere, for that matter — fear that their residents might flee or rebel if forced to foot the entire bill for the state’s insatiable taxing apparatus, they might consider creating a more business-friendly climate or providing relief to those same taxpayers. We like to kid.

The actual proposal for the deduction has yet to be made public because Democrats understand their political predicament and would prefer to push this through in the dead of night. It could entail doubling or tripling the current cap or putting an income cap on a full repeal of the limit.

“I don’t think anyone knows what the right number is right now,” Jeff Ziarko of the research firm Economic Policy Strategies told Rick Newman of Yahoo Finance. “The political optimization lands between what people want, which is for the cap to go away, and what’s feasible.”

Translation: Senate Majority Chuck Schumer and House Speaker Nancy Pelosi hope to find the number that’s least likely to call attention to their unbridled hypocrisy.