The proposed bill caps the tax deduction for mortgage interest, which does not benefit the economy, does cost the government a lot of money (which again, must be raised some other way, such as through higher marginal tax rates), and pushes up the price of housing, particularly in more affluent areas.
Republicans have also gone after the deduction for state and local taxes. As with the home-mortgage interest provision, they are not getting rid of it entirely. They limit it to property taxes, and cap it at $10,000.
These two proposals are complemented by a number of equally salutary, though less well-known, reforms on the business deduction side. So why am I not smiling?
Well, there is the aforementioned budget problem of paying for all this reforming. But there is also the political problem of doing so. It is hard not to notice that this bill is designed to spread benefits among Trump supporters, particularly the Republican donor class, while laying most of the costs on a single group of people: six-figure professionals living in blue states, a group known as the HENRYs (High Earning, Not Rich Yet). One can make a principled justification for levying high taxes on the rich, who can most easily spare the money. One can make a principled justification for taxing everyone equally, share and share alike. But what is the principle by which almost all of the pain of this tax bill should be borne by affluent, but not rich, people who happen to live on the coasts? Other than "we don't like them."
Republicans are trying to sell this tax package as a fairer reform that will make things better for all Americans. If that is what they are actually trying to do, then they should probably not offer something so obviously shaped as a shiv for Donald Trump's political enemies. If not out of principle, then out of naked self-interest. However astonishing their current disarray, Democrats are going to be back in power someday.
And if Republicans weaponized the tax code in this fashion, Democrats are likely to pick up this crudely crafted weapon and turn it on its creator.
Megan McArdle is a Bloomberg View columnist. Email: email@example.com
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Source : https://www.dallasnews.com/opinion/commentary/2017/11/07/gop-tax-plan-goes-tenacious-deductions-need