One of the biggest battles that’ll be fought this year to extend the Trump tax cuts will be the state and local tax deduction (SALT). The Trump tax bill wisely capped the deductibility of federal income taxes on state tax forms to $10,000 per return.

The SALT deduction is awful federal policy that rewards states to raise their income tax rates, because in-state residents get to deduct roughly one-third of the tax hike from their federal tax return.  It punishes low-tax states.

Our senior fellow, E.J. Antoni, found that when the full SALT deduction was in effect, more than half of the benefits went to six blue states and almost one-third went to wealthy tax filers in California and New York (the nation’s highest tax states).

In New York City, someone making $100 million would see their federal tax liability REDUCED by about 9 percent, saving $3.2 million. Progressives who claim they want “to make the wealthy pay their fair share” are now advocating the largest tax cut for millionaires and billionaires in American history.

At least one honest Democrat, Colorado Senator Michael Bennet, a moderate, has called out this hypocrisy: