alt Hacker News> I just think the team did a good job from what I’m reading. This inconsistency doesn’t impact the top 1% household (who commonly use larger loopholes to avoid taxation at magnitudes more significant than this inconsistency like using loan against assets which they can write off interest against taxes instead of paying taxes to the government). This quirk impacts households in the 2% level for just one fiscal year or more where they might just have a taxed event like a real estate sale (non reinvested primary within the timeline), a taxable equity grant (that the pay taxes on but may lose), one time capital gains from investment sales, etc.
The top 1% have a significant portion of high-income W2 earners who basically have been forced into the standard deduction since the TCJA. It definitely impacts them because that's exactly what the SALT cap was designed to do.
The business owners (lawyers, dentists, investment bankers) are the ones that have all the fun tax breaks, and they're probably more like top-0.1%.
This specific quirk starts at $500k peaking at $600k and phasing out towards $650k collective yearly income.
Agreed that it’s W2 earners paying taxes at high rates than business/capital owns, which is why it’s a mostly income tax system of collection. This is where many of us see this as an unfair tax burden being put first on people not businesses nor its owners and leveraged mostly towards income of w2 workers. People don’t pay taxes on our their income after expenses and extensive rebates like businesses/capital ownership.