Katie Porter: “The basic principle of an income tax is that you are taxed on the money that you have available to purchase things, to…”

“The basic principle of an income tax is that you are taxed on the money that you have available to purchase things, to purchase goods and services, to invest, to save. You are taxed on that. That is what a progressive system of taxation means. When you are having taxes taken out of your paycheck, or you owe taxes to your State and local government, you do not have that income left over. So let's use an example. If someone earns $100,000 and they pay, as is typical in my district, $20,000 in State and local tax, that is not optional. They must pay that $20,000 under the law. What they have left to provide for their family, to save for college, to pay for housing, to do other things, is $80,000. That is the amount of income that the Federal Government should tax. What the SALT cap does is say to the family earning $100,000: You can only deduct $10,000, a completely arbitrary number. What that does is say to a family that only has $80,000 left because they had to pay the county, they had to pay the city, they had to pay for fire services and school services. And they pay that money because they are proud of their community and they want our communities to thrive. But then they are taxed as if they have $90,000 available to them, but they don't. They only have $80,000. So this whole idea of capping the State and local tax deduction is completely contrary to the entire basic theory of an income tax, which is you pay tax on your available income.…”