In 1986, big gubmint tax and spending slasher Ronald Reagan unveiled a tax “reform” plan that continued the massive transfer of wealth from the poor and working classes upwards to the very wealthy. Reagan’s plan eliminated essential deductions for consumer loans (auto, credit card, personal) and overhauled the deduction for medical expenses, so that they had to have amounted to 10% of an individual or married couple’s income.
Donald Trump, as always dominated by the disastrous neocon thinking of Republican leaders like Paul Ryan, has released a new tax “reform” plan. The plan is huge- nearly 500 pages long- and thus, like most important recent legislation, will almost certainly not be read in depth by those voting on it or the mainstream “journalists” tasked to report on it. What we do know so far about the plan hardly inspires confidence or optimism.
Perhaps the most inexplicable aspect of this plan is its attack- and there is no other word to describe it- on home ownership. As a long time licensed realtor myself, I can attest to how stagnant the real estate industry is, especially for first-time home buyers, upon whom the industry has always relied. It is already difficult to find buyers who can afford starter homes, but this plan will make it even harder.
Homeowners will no longer be able to deduct the property taxes they pay on their home under this plan. Mortgage interest deduction, while salvaged, has been slashed so that only mortgages up to $500,000 can be deducted. That may seem like a lot, but the cost of housing in many areas of America is such that many upper middle-class homeowners will lose a valued tax benefit. It is also unclear if this $500,000 cap applies to each mortgage a…