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Photo: Yuri Gripas/Abaca/Bloomberg via Getty Images

Blue-state lawmakers are pressuring President Biden to cut some taxes — while he raises others — in the horse-trading for his next big package.

Why it matters: The cold math suggests Biden will be forced to sacrifice the size of his infrastructure ambitions or embrace even more deficit spending — and convince Congress to go along.

Driving the news: Democrats, including Senate Majority Leader Chuck Schumer (D-N.Y.), are pressing the White House to repeal the $10,000 limit for deducting state and local taxes — the so-called SALT cap — from their federal tax bill.

  • Removing the limit — imposed by President Trump's 2017 tax reforms — would cost about $357 billion over the next five years, according to an analysis from the Joint Committee on Taxation for Rep. Tom Suozzi, who wants to eliminate the limit.
  • Repealing the cap is deeply unpopular with progressives, who argue doing so would favor the rich.
  • But many voters in high-tax (and Democratic) states — like New York, New Jersey, Connecticut, Maryland and California — hate the limit. The provision is scheduled to expire in 2026.

The big picture: The White House has been reluctant to put a price tag on its infrastructure plans, but Democrats close to the administration say it will likely be $1 trillion to $2 trillion.

  • Some Democrats, including Sen. Joe Manchin (D-W.Va.), are demanding the president find new revenue to pay for at least part of the package.
  • Biden himself has never been crystal clear about what new spending needed to be offset with new taxes, and gave himself an out during the 2020 campaign by maintaining "one-time" spending didn't require tax increases.
  • He never defined what that means and essentially stopped talking about it after he secured the nomination.
  • He also didn’t include it in any of his “Build Back Better” tax and infrastructure proposal.

Go deeper: During the campaign, Biden proposed policies that would raise about $3 trillion in new revenue, according to the Penn Wharton Budget Model.

  • But Democrats close to the White House think new revenue will probably be a total of less than $1 trillion, with the easiest changes on the corporate, capital gains and personal side.

By the numbers: Manchin told Axios he would support the corporate tax rate increasing from 21% to 25%, which could yield $400 billion to $500 billion in new revenue over 10 years.

  • Returning the top personal rate to the pre-Trump 39.6% would bring in another $153 billion.
  • Taxing capital gains as ordinary income — which would eliminate the so-called “carried interest” loophole for private equity — adds another $178 billion.

The bottom line: The amount of new revenue Biden could raise night not exceed the amount of lost revenue from a full repeal of the SALT cap.

Editor's note: This story has been updated to include new figures for the cost of repealing the SALT cap over five years.

Go deeper

45 mins ago - World

Scoop: U.S. and Israel to hold strategic Iran talks on Tuesday

Jake Sullivan. Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty

Top national security officials from the U.S. and Israel will convene virtually on Tuesday for a second round of strategic talks on Iran, three Israeli officials tell me.

Why it matters: The talks come two days after an explosion at an Iranian nuclear facility that experts consider a likely act of Israeli sabotage, and one day before the U.S. resumes indirect nuclear talks in Vienna over a return to the 2015 nuclear deal — a prospect that has raised anxiety levels in Jerusalem.

Updated 52 mins ago - Axios Twin Cities

Police: Officer who shot Daunte Wright accidentally pulled gun instead of taser

The officer who fatally shot Daunte Wright, a 20-year-old Black man, outside Minneapolis Sunday appeared to have inadvertently pulled out her gun instead of a taser, police said.

Driving the news: "This appears to me, from what I viewed in the officer's reaction and distress immediately after, that this was an accidental discharge that resulted in the tragic death of Mr. Wright," Brooklyn Center Police Chief Tim Gannon told reporters Monday.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: The warning signs of a longer pandemic — CDC director: Answer to Michigan COVID-19 surge is "to close things down."
  2. Vaccines: Former FDA chief offers reality check on vaccine passports.
  3. Economy: Jobs growth could be curbed by demands for higher wages.
  4. World: Facebook to push notifications about vaccine eligibility to 20 countries outside of the U.S. — Brits flock to pubs for first time in months as U.K. lockdown eases.
  5. Variant tracker: Where different strains are spreading.

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