SALT relief will help the sort-of rich get sort-of richer

[Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a HENRY of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - The [sort-of-rich get richer](. - China’s problems [run deeper than we think](. - The job [market is stronger than we think](. - Though most [Americans don’t believe it](. Throw Some SALT on Those HENRYs In this week’s humbling election results, Democrats heard one clear message from the country: Give more tax breaks to the wealthy. Wait, no. That can’t be right. But one of the main things Dems got right to haggling over after the election was just [how high]( to lift the cap on state and local tax (SALT) deductions, a move that would overwhelmingly benefit people who make a lot of money. The 2017 tax bill lowered the cap partly to own the blue-state libs, although it also slashed tax rates for those same libs, meaning on balance a lot of [fairly well-off people paid less in taxes](, writes Justin Fox.  In the sweet spot of all these tax machinations — taxinations? — are the “high earners, not rich yet,” or HENRYs for short. This is the name somebody once gave to people who make between $200,000 and $500,000 a year. That may sound like “rich” money to you, but it doesn’t go as far in California, New Jersey and New York as it does in states where living costs are lower. SALT is one reason these states are so expensive, and raising the SALT deduction cap will give these HENRYs even more tax relief, Justin writes. As you can see from the chart above, the government is already leaving a bunch of money on the table by giving HENRYs a break. The risk is that someday it looks to the HENRYs to collect. Read the [whole thing](. Surprise! China’s in More Trouble Than You Think A while back this newsletter [declared]( perpetual implosion machine Evergrande would not be another Lehman Brothers. This newsletter is always right about everything, as all of you intelligent and physically attractive readers know. But every now and then it feels as if this proclamation was a bit like being a cruise-ship lookout ignoring an iceberg in the North Atlantic because it didn’t seem all that big. This trite analogy makes more sense when you consider how we keep uncovering stuff Chinese property developers have hidden from us. One called Kaisa, China’s second-biggest after Evergrande in dollar-denominated bond issuance, just said, oops, it wouldn’t make some wealth-management product payments. Shuli Ren notes [this came as a terrible shock to investors]( because: - Missing payments is bad. - Kaisa seemed fine, having recently cleared Beijing’s “three red lines” for borrowing. - Nobody even knew Kaisa had a wealth-management business in the first place. This is a strong hint that Beijing’s “three red lines” are a joke, Shuli writes. Instead of forcing developers to be more careful, it inspires them to hide business lines and debt off the books. As we said [yesterday]( in relation to climate change, and as is always true about icebergs, it’s the stuff you can’t see that gets you. China’s property developers could get some relief soon. The economy is slowing down in a way that could bother Xi Jinping’s political standing, and David Fickling points out [China uses construction to goose its economy]( the way the U.S. uses interest rates. The bad news is that each fresh hit of this kind of stimulus not only delays China’s much-needed economic transformation, but it’s also awful for the planet: Out of the sinking cruise ship, into the freezing North Atlantic, or something. A Goldilocks Jobs Report, But We’re Still Complaining The October jobs [report]( was a rare treat these days: surprisingly good economic news with few downsides. Even past months’ numbers were revised up sharply. The economy is in better shape than we realized. It’s also starting to look as if a wave of pandemic-era early retirements have [made the job market look worse than it really is](, writes Brian Chappatta. That means it’s possible the Fed can start to raise interest rates next year without murdering the economy. A tight labor market is giving workers bargaining power, but it’s also [encouraging factories to replace workers]( with robots, writes Brooke Sutherland. Robots may be one reason [Americans are still so down on the economy]( despite record-high stock prices and roaring job and wage growth, though it’s probably not the biggest. Justin Fox names some likelier culprits, including: - Inflation, which is eating into those wage gains. - Never-ending pandemic and supply-chain problems. - A media bias for bad news. If it bleeds, it leads, and that includes the economy (see [milk prices, CNN coverage of](). Telltale Charts Luxury-goods makers [can’t afford to destroy unsold items]( anymore, given the damage it does to their reputations, write Andrea Felsted and Alexis Leondis. Giving them away is better. [Post-pandemic life is no picnic for Peloton](, as it has to spend more to lure new customers, writes Tara Lachapelle. Further Reading The elections were a wake-up call to Dems to [compromise more and get stuff done](. — Bloomberg’s editorial board The [Bank of England wrong-footed bond markets]( by setting them up for a rate hike it didn’t deliver. — John Authers Europe’s [climate-risk stress tests for banks are half-baked](, considering how little data most banks have. — Paul Davies Instead of [panic-shopping for Christmas now](, you’ll still get better deals and spend less if you wait. — Alexis Leondis ICYMI Pfizer’s [Covid treatment pill]( looks like a knockout. This may [finally be Infrastructure Week](. Shiba Inu, the actual [dog, is in high demand](. Kickers Giant spiders [invade Georgia](. (h/t Mike Smedley) Scientists claim algorithm can [predict suicidal thoughts in teens](. Is your boss [watching you at home](? Why is [everyone spitting](? Notes:  Please send milk and complaints to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Twitter]( and [Facebook](. 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