Deduction workaround for SALT is a gimmick
Senate Minority Leader Chuck Schumer with Hempstead Supervisor Laura Gillen, center, and North Hempstead Supervisor Judi Bosworth on Monday in Floral Park. Credit: Howard Schnapp
The state taxes I pay on income and the property taxes I pay on my house aren’t charitable contributions.
It tickles my fancy to imagine taxes being charitable contributions. Then they’d be tax-deductible. More important, it could mean commercials featuring Sally Struthers standing in front of a Long Island elementary school and cooing, “A charitable school-tax contribution of just $43 a day can guarantee children like little Jimmy books, a desk and standardized tests he won’t take. Jimmy will send you a text saying ‘thnks bro’ monthly. And if you donate now, your house won’t be seized for auction!”
If state and local property taxes were charitable contributions, few of us would pony up. But ever since President Donald Trump’s tax-reform plan put a $10,000 cap on the federal deduction for those state and local levies, some politicians have tried to establish ways to outwit the law by labeling such taxes charitable contributions, the deduction for which is often still unlimited.
New York State and Suffolk County passed laws setting up such workarounds. Then the IRS issued regulations that said, basically, “Cut it out, Buster!” and disallowed them.
Now Sen. Chuck Schumer is trying to overturn that regulation. His plan involves a tricky tool called a Congressional Review Act Resolution of Disapproval that would allow him to make the change with just 51 votes in the Senate, which is possible. But such a measure also would have to pass the House ( probably could), and be signed by Trump ( not a big Schumer fan, but never say never with this guy).
The cap on SALT deductions, which came with a doubling of the standard deduction to $24,000 a year for families, is terrible for the housing markets on Long Island and in other high-cost areas. It makes little economic or moral sense to blow up housing markets to lower taxes on corporate profits. The swap is neither stimulative nor fair, and the deduction changes that have hurt many families are a very specific attack on Democratic states.
But pretending these taxes are charitable giving to evade taxes might be more dangerous than the SALT cap itself.
In a stable and trustworthy society, laws have weight and words have meaning. Evading isn’t the answer to losing political battles, and devaluing the rule of law can be more dangerous than suffering a bad law. You break truly unjust laws, that deprive people of life and liberty, because those laws are more poisonous than lawlessness. But the SALT deduction cap doesn’t meet that burden.
Anytime we condone twisting or evading laws, we corrode the rule of law. I’m for big increases in legal immigration, and I don’t favor terrorizing immigrants here illegally with midnight raids, but failing to kick out people with deportation orders has made our system a joke. People coming here illegally do not respect our immigration laws because many Americans don’t respect those laws.
The same was true of marijuana and gambling bans that were rarely enforced for decades and are now wisely being reversed, and of many other laws we mostly treat as jokes. Being a nation that respects laws often matters more than the effect of individual laws. We should be careful about the laws we pass, and serious in how we enforce them.
Because not taking the rule of law seriously is a hallmark of the kind of nations that actually need Sally Struthers’ pleas to feed their people.
Lane Filler is a member of Newsday’s editorial board.
