House Minority Leader Nancy Pelosi made her political career denouncing income inequality and advocating a more progressive tax code, but the veteran lawmaker’s accounting practices prove she wants to keep as much of her income as possible come tax time.
Pelosi, the wealthiest woman in Congress, tried to preserve $64,000 in property tax breaks — commonly referred to as the state and local taxes (SALT) deductions — that are eliminated under the recently passed tax reform bill. In a tactic that’s become commonplace for filers in states with steep property taxes, Pelosi and her husband pre-paid the second half of their 2017-2018 property tax bills for both their San Francisco and Napa homes, according to The Washington Free Beacon.
The new tax law, which Pelosi described as “Armageddon” and “like death,” caps property tax deductions at $10,000, which means Pelosi’s shrewd accounting will likely save her tens of thousands of dollars.
Pelosi and her husband, who combined are worth over $100 million, pay $137,000 annually in property taxes on their two California homes and their Georgetown waterfront condo. The couple will enjoy some savings since the new tax code lowers the top individual rate from 39.6 to 37.5 percent, but tax experts believe the loss of property tax deductions will likely result in a more expensive overall tax bill.
Pelosi’s spokesman, Henry Connelly, focused on the tax bill’s impact on the “middle class” when asked about Pelosi’s evasive maneuvering.
“Millions of middle-class families and homeowners in cities and suburbs across America are facing a big state and local tax hike because of the GOP tax scam,” Connelly told the Free Beacon in an emailed statement. “Any middle class family whose state and local income and property taxes add up to more than $10,000 will be forced to pay more—and many of these families also prepaid their property taxes before 2018 in hopes of staving off this GOP tax hike, including, for instance, 72,000 people in San Diego County alone.”
“This action is compliant with current tax laws and IRS guidance,” he added.
Pelosi has insisted eliminating the SALT deduction harms the middle class, but the vast majority, nearly 90 percent, of Americans who claim the deduction have an annual income over $100,000, according to the Tax Foundation.
It remains unclear whether the efforts of Pelosi and the thousands of Americans who prepaid their property taxes in December will pay off as the IRS has issued guidance indicating municipalities must assess 2018 property taxes before the payments.
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