Polls show that about 70% of Americans don't support the House and Senate's plans for tax "reform".
Economic impacts of the GOP's plans besides the obvious benefits to the wealthy -
The housing market is going to get crushed. Just as the housing market is returning to 2008 levels, capping mortgage interest deductions by definition will deflate home prices. When contemplating a home purchase, or qualifying a for a home loan, the tax deduction is a net add to cash flow to offset the net cost of the mortgage. The cap will mostly effect suburban housing. Which is a key GOP battleground.
Putting aside eliminating deductions for state taxes, caps on property taxes are going to negatively effect public education. Home ownership and home prices, are how public education is funded. Reducing the tax deduction of mortgage interest and property taxes means either less money to public schools and/or higher property taxes. The latter is an equation for economic contraction. Furthermore, consider people like myself, who have sent their children to private schools (Catholic). These tax changes means that private school consumers - who already are effectively subsidizing public schools - will not be able to afford to do so. That compounds the economic problem for public schools. New public schools will have to be built to support more students. That is a big local capital bad surprise. In turn, that will almost assuredly mean a big jump in property taxes. Another huge negative effect to the key battleground of the suburbs for the GOP.
So why is the GOP doing this?
It's not about proving to voters they can get something done.
It is a calculated kamikaze dive for the benefit of their donors/emperors.
Here are the political facts. GOP lawmakers face two problems. One is anti-Trump anger and the movement of Democrats to vote against Republicans in 2018 in greater forces than normal. The other is Bannon, who wants to replace GOP lawmakers with ... whatever crazy people want .. like Roy Moore.
So, many already feel dead politically. By passing a draconian tax "reform" - which will be deeply unpopular - it nonetheless will stick for at least three more years. Even a Democratic majority can't reverse it, because Trump will still be president and will veto it. Even on the rare chance Trump is impeached, all succession planning means a GOP veto.
So, unless the reader is a selfish zillionare, the risks of this tax plan (a) being enacted, (b) you being negatively effected, and (c) the economics of your community and the greater economy being upended, have unfortunately increased, due to political undercurrents brought on by Trump and Bannon.
November 18, 2017