Sen. Bernie Sanders

Sen. Bernie Sanders (I-Vt.) speaks with reporters on Capitol Hill on Tuesday, November 2, 2021 in Washington, D.C. (Photo: Kent Nishimura / Los Angeles Times via Getty Images)

'Bad Politics, Bad Policy': Sanders Slams House Democrats for Including Tax Cut for Rich in BBB

"The bottom line here is we have to help the middle class, not the 1%," said the senator.

Sen. Bernie Sanders warned late Thursday that a tax deduction that will disproportionately benefit wealthy Americans and that Democratic House leaders insisted on keeping in the Build Back Better Act will harm the party in upcoming elections, considering the deep unpopularity of policies that help the rich save money instead of narrowing the wealth gap.

Speaking to CNN, Sanders (I-VT.) said the House plan to lift the amount of state and local taxes (SALT) that can be deducted from federal tax payments to $80,000 is both "bad policy" and "bad politics."

"We've got to demand that the wealthy start paying their fair share," Sanders told correspondent Manu Raju, "not give them more tax breaks. The bottom line here is we have to help the middle class, not the 1%."

House Speaker Nancy Pelosi (D-Calif.) and other powerful Democrats from states with high income taxes backed the proposal to increase the SALT deduction cap from $10,000 through 2030, giving an average tax cut of $25,000 to households earning $1 million per year--10 times as much tax relief as the average middle-class family will get from the child care tax credit included in the Build Back Better Act, according to the Committee for a Responsible Budget.

On social media, Sanders warned that "the hypocrisy is too strong" in the provision and will make it harder for the Democrats to turn out voters in 2022 as they attempt to campaign as a party for working people and point to clear distinctions between themselves and the Republicans.

An analysis from the Urban Brookings Tax Policy Center showed that 94% of the tax benefits in the SALT deduction cap plan will go to the top 20% of earners--households that earn $175,000 or more.

A poll taken by Vox and Data for Progress in October found that 71% of Americans support raising taxes on the wealthy to pay for social spending and climate action provisions in the Build Back Better Act.

The House passed the Build Back Better Act Friday morning in a 220-213 vote, mostly along party lines. Conservative Democratic Rep. Jared Golden of Maine was the only Democrat to vote against the $1.75 trillion 10-year investment in climate action and social spending, asserting that the SALT deduction plan was his reason to oppose the legislation.

"You can't be a political party that talks about demanding the wealthy pay their fair share of taxes, and then end up with a bill that gives large tax breaks to millionaires."

Republicans are also already making clear that ahead of the 2022 midterms they'll be taking advantage of the opportunity to accuse the Democrats of giving a tax giveaway to the rich--despite the GOP's own decades-long push to give tax breaks to corporations and the wealthy.

"If you look at the amount of money they are going to give to rich people, it's staggering," National Republican Senatorial Committee Chair Rick Scott (R-Fla.) told Politico. "I'm going to make sure that in all of our states that everybody knows what [Democrats] are doing."

Sen. Ron Wyden (D-Ore.), who, along with Sens. Elizabeth Warren (D-Mass.) and Angus King (I-Maine), is pushing to include a tax on corporate profits in the Senate's version of the Build Back Better Act, expressed concern.

"In the last few days you have seen Republicans saying that Democrats are being softer on millionaires than they were in 2017," Wyden told Politico. "They are pounding that message."

Along with Sen. Bob Menendez (D-N.J.), Sanders is proposing that the Senate include a provision that would phase out the SALT deduction for households making $400,000 or more per year.

Warren said Thursday that beyond harming Democrats' chances of maintaining power in 2022, the SALT deduction will harm working families.

"I'm not worried about the perception that we're doing too much for wealthy people. I'm worried that we may do too much for wealthy people. It's the reality that troubles me," Warren told Politico. "I'm not here to help those at the top."

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