Mayor Pete On Taxes: Democratic Presidential Candidate Takes On State, Local Deduction

Democratic presidential hopeful Pete Buttigieg on Monday called for the repeal of the cap limiting the income tax deduction for state and local taxes to $10,000.

Buttigieg said the cap unfairly penalizes those living in high-cost areas, amounting to double taxation.

The 2017 Republican tax overhaul imposed the limit while at the same time granting tax breaks to corporations and the wealthy. Democrats in December proposed a temporary repeal of the cap, which already is set to expire in 2025.

“Trump placed a politically motivated cap on [state and local taxes],” the former mayor of South Bend, Indiana, said in a press release emailed to IBTimes. “Trump’s economic adviser gloated that it would deliver ‘death to Democrats’ by hurting families in Democratic-leaning states with high costs of living and more progressive tax policies and social services.”

The proposal opens Buttigieg to criticism from progressives who say the move would benefit wealthier Americans while the party should be focused on income inequality.

A study by the nonpartisan Joint Committee on Taxation found more than half the benefit of repealing the cap would go to millionaires, with 94% of the breaks going to taxpayers earning at least $200,000.

Buttigieg also proposed rolling back Trump and Reagan-era tax cuts for corporations and the wealthy, imposing a financial transaction tax on Wall Street and making banks pay for financial risk, and cracking down on corporations that ship profits overseas.

Buttigieg’s proposal also calls for expanding both the child tax credit and earned income tax credit.

"This president has done everything in his power to line the pockets of corporations and the wealthy, while too many working and middle class families are having to choose between child care and saving for college, and while homeownership remains out of reach for millions,” Buttigieg said.