The California Association of Realtors in Los Angeles has taken out full-page advertisements in major national news telling President Donald Trump and California’s congressional delegation that Trump’s proposed Tax Reform Plan would punish California residents should it become law.
“Tax Reform shouldn’t hurt Californians, but the House of Representatives proposal does, in a big way,” wrote Steve White, the association’s president in the ad, which is basically an open letter to the president. “It eliminates important incentives that help first-time homebuyers by capping the mortgage interest deduction, limiting property tax deductibility and changing capital gains exemptions.”
The plan, if it passes, will punish homeowners and eliminate homebuyers’ financial benefits, so it will fail rather than help America’s middle class keep more of their income, White wrote.
As proposed, the House of Representatives’ bill would lower the mortgage interest deduction cap to $500,000 from $1 million, as well as eliminate the deduction on second homes, according to White’s letter. It would also do away with state and local income tax deductions, cap property tax deductions at $10,000 and extend the capital gains exclusion qualification to five years from two years. The Senate version of the bill keeps the $1 million deduction, but also gets rid of the state and local income tax and property tax deductions.
White writes that in the Golden State where there’s a housing deficit, homes cost on average two-and-a-half times the national average. Additionally, only about one-third of the state’s families can afford a median-priced home, he added.
The median home price in the San Fernando Valley was $650,000 in August, a 4 percent increase from a year ago. The median condominium price was $411,500, up 6.9 percent in the last year.
The open letter ran in a full-page ad in Wednesday’s Los Angeles Times, Orange County Register, Bakersfield Californian, San Diego Union-Tribune, Sacramento Bee, Modesto Bee, Fresno Bee, Wall St. Journal-DC edition, and Politico, according to the association.