Bernie Sanders is pushing to limit a tax break in Biden's $1.75 trillion spending bill that would mostly benefit the rich

• Sen Bernie Sanders introduced plans to limit a tax break for the rich in a new bill.
• The $1.75 trillion bill would have scrapped a limit on so-called SALT deductions.

Sen. Bernie Sanders of Vermont unveiled new plans Wednesday to limit tax breaks for the wealthiest that are included in President Joe Biden's $1.75 trillion social and climate change bill.

Under plans proposed by Democrats earlier in the week, the bill would scrap the $10,000 cap on the amount of state and local tax (SALT) that can be reclaimed from federal tax bills.

Some Democrats argued that the cap - imposed in the Trump era - unfairly hurt those in high-tax states controlled by the Democrats.

-Garrett Watson (@GS_Watson) November 3, 2021

But according to an analysis by the Committee for a Responsible Federal Budget, the repeal would have resulted in a large tax break for the richest 5% of the country.

Sanders in a tweet described the potential tax break as "beyond unacceptable."

At a press briefing Wednesday with New Jersey Democrat Sen. Bob Menendez, he unveiled a new proposal he said would be fairer.

The new plans would see the $10,000 cap retained - but only for households with an income of at least $400,000 a year.

Those with an income under that amount would would be able to reclaim an uncapped amount, which the two senators said would be a small enough hit to not contribute to the overall federal deficit.

Richer households would be prevented from benefiting in the same way.

Sanders said: "We have heard for months and months and months from Democratic colleagues that we are sick and tired of seeing the wealthiest people in this country, including multibillionaires, who some years pay nothing in federal income taxes.

"The American people are disgusted with that … so if somebody comes up with a proposal that says, 'Yeah, we're going to give even more tax breaks to these people,' it's not a question of messaging. That is terrible, terrible policy."

Biden has pledged that the social care and climate change bill would be funded by raising taxes on corporations and the wealthiest.

With narrow margins of Democratic control in the House and Senate, Biden needs almost all lawmakers to sign off on the bill in order to pass it under an arcane Senate mechanism called budget reconciliation.

In recent weeks the mechanisms by which the bill would be funded have become a key bargaining chip. The proposals stalled for weeks as centrist and progressive wings of the party wrangle over the details.

The proposal of Sanders and Menendez contrasts with one suggested by the House Rules Committee, which would raise the SALT deduction cap to $72,000 across the board, and would keep it in place until 2031.

The senators said that they believed the alternative proposal still gives too much benefit to the wealthy.

According to an analysis by the Tax Foundation, the $72,000 proposal would see most of the benefit go to those with an income of $250,000 to $1 million.