Nolte — Hypocrisy: Trump Raises Taxes on Rich; Blue State Democrats Create Avoidance Gimmicks

New York Governor Andrew Cuomo delivers one of his State of the State addresses at SUNY Purchase in Purchase, N.Y., Tuesday, Jan. 10, 2017. (AP Photo/Seth Wenig)
AP/Seth Wenig

If you had to boil the Democrat Party down to a single mantra, “Raising Taxes on the Wealthy” would be a reasonable choice. It seems as though every elected Democrat is desperate to raise taxes on the rich. Moreover, all Democrats, along with their media allies, freak out whenever there is any talk of lowering the top tax rate.

And yet, after President Trump actually did raise taxes on the wealthy last year, some of the most left-wing states in the country immediately created gimmicks to protect the wealthy from those tax increases.

In Illinois, California, and New York, three of our bluest states, where hordes of super-rich leftists call home (Manhattan, Hollywood, Chicago, Silicon Valley), Democrats are twisting themselves (and in some cases, the law) into knots to shield the wealthy from paying higher federal taxes.

For this to make sense, let me explain.

The way in which Trump and the GOP raised taxes on the wealthy was through a $10,000 cap on the deduction of state and local taxes. Prior to this cap — and this is beyond maddening — the wealthy (if you pay more than $10,000 in local taxes in New York, you are making $200,000-plus) were able to deduct every penny of their local and state taxes from their federal income tax. Meaning, this deduction was unlimited. Meaning, the wealthy paid no federal income tax on whatever amount they paid in local taxes. Meaning, the higher the local tax burden, the less they paid in federal taxes. Meaning, everyone else in America was forced to subsidize the tax burdens levied on the wealthy who choose to live in high-tax states.

Rather than being thrilled at this GOP tax increase on the rich, Democrats are freaking over the $10,000 cap because the ability to deduct insanely high local taxes allowed local Democrat lawmakers to look like tax-the-rich champions when they really weren’t. A big chunk of that local tax burden was being subsidized by the federal government (i.e. all Americans).

This cap will also make it harder in the future for Democrats to raise local and state taxes because now that the wealthy will actually have to pay all of that tax, they will squawk more. My guess is that, going forward, a lot fewer wealthy Democrats will be sanctimoniously calling for their own taxes to be raised.

New York is an excellent example. It is estimated that the tightening of this loophole will result in a $14 billion federal tax increase on wealthy New Yorkers.

And so, to the surprise of no one who understands just how dishonest and hypocritical elected Democrats are, instead of praising Trump for his “progressive” tax increase, Gov. Andrew Cuomo (D-NY) has threatened to file suit to kill the tax increase.

Just stop and think about that: a far-left Democrat is threatening to sue the federal government for raising taxes on the rich.

Because Cuomo’s suit is absurd and will go nowhere, along with New York, a number of other states (all run by left-wing Democrats) are attempting to cobble together gimmicks that will shield the rich from paying higher taxes. Here are just a few examples:

The Los Angeles Times reports:

A new proposal from a Los Angeles lawmaker has emerged aiming to help Californians evade a key provision of the federal tax overhaul passed last year. Assembly Bill 2217 … would create a tax-credit system linking charities, educational institutions, the state treasury and individual taxpayers in an effort to allow Californians to sidestep the new $10,000 federal cap on state and local tax deductions.

The bill is sponsored by a Democrat assemblywoman and is similar to another effort backed by numerous California Democrats reported early this year.

In other words, California Democrats have spent five whole months trying to figure out a scheme that will allow the wealthy to avoid paying taxes.

In New York, Democrat lawmakers have created “some options for getting around the $10,000 limit on state and local tax deductions imposed by the Republican tax overhaul.”

This workaround is also a sketchy scheme that might violate IRS rules. But this shows just how desperate New York Democrats are to shield the wealthy from having to pay “their fair share.”

In Illinois, the Democrat-led legislature is also actively pursuing a “workaround” to help the wealthy avoid taxes.

In January, the Nation, which is about as left-wing a news outlet as you will ever find, actually published a piece calling for blue states to fight Trump’s tax increase on the wealthy.

So, as you can now see, Democrats do not believe in taxing the rich. What they do believe in is raising taxes on the wealthy, but only if there are tax gimmicks in place that ultimately result in the rest of us subsidizing those tax increases.

Follow John Nolte on Twitter @NolteNC. Follow his Facebook Page here.


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