CRFB:

The current version of the Build Back Better Act under consideration in the House would increase the state and local tax (SALT) deduction cap from $10,000 to $80,000 through 2026 while increasing the child tax credit from $2,000 per child to $3,000 per child (and $3,600 per child under 6) for 2022 and make it fully refundable. As we have pointed out many times, there is no such thing as progressive SALT cap relief. Roughly 98 percent of the benefit increase would accrue to those making more than $100,000 per year, with more than 80 percent going to those making over $200,000.

One way to illustrate this distribution is to compare the benefit of SALT cap relief to the benefit of the expanded child tax credit. Under the current House bill, most high-income households will receive more tax cuts from SALT cap relief than low-income and middle-class households will receive from the expanded child tax credit.

The below graph illustrates the tax benefit of a family of four in Washington, D.C. next year. We find that a household making $1 million per year will receive ten times as much from SALT cap relief as a middle-class family will receive from the child tax credit expansion.