Much of the current tax plan includes stipulations that affect Californians adversely and disproportionately, while benefiting large corporations and the super wealthy. Here are just a few of the key facts and figures:
Elimination of the state and local tax deduction or “SALT”: About 6 million Californians deducted their state and local taxes from their federal income tax returns in 2014, amounting to one-fifth of the total value of the deduction nationwide – making it a lucrative new revenue source for the federal government. With the proposed increase in the standard deduction, losing the SALT deduction would have the greatest impact on middle-class and upper middle-class residents in the state.
Reducing the deduction for interest paid on mortgages: According to the nonpartisan Tax Policy Center, reducing the deduction for interest on mortgage debt from $1 million to a suggested figure of $500,000 would mean an average increase in taxes of $3,290 for hundreds of thousands of California families. This is compounded by the fact that the interest deduction would become useless for most families unless their home was worth more than $801,000, the result of the suggested doubling of the standard deduction.
As the California Association of Realtors notes, removing important incentives for home buying, especially in a state with some of the highest housing costs in the nation, would be devastating to California’s housing market and overall economy.