It looks like the tax reform bill will be signed by Congress, and sent to Trump for signature. The California Association of Realtors, led by our president, has been claiming all along that this tax bill will be bad.
On Friday, I sent this email to the C.A.R. rep Sean Bellach:
I object to this constant barrage of negativity – can the C.A.R. please use some common sense and take actions that support realtors doing more business? Let’s celebrate publicly that we got almost all that we wanted, and home values won’t be going down now!!!!
Yesterday, Sean responded:
Thank you for contacting us regarding C.A.R.’s Call-for-Action on the tax reform bill, H.R. 1. We understand and have looked at the issues you have raised; however, nearly every independent analysis of the tax bill confirms C.A.R.’s fears that the cost of tax reform will be placed on homeowners in high-cost states, specifically California, New York and New Jersey.
C.A.R. is not opposed to tax reform, but it cannot support a bill that pays for tax reform by increasing taxes on California’s homeowners. H.R. 1 provides not one new benefit for homeownership or to support housing, but instead eliminates and weakens long standing benefits of the industry.
These are the reasons for C.A.R.’s opposition to H.R. 1 and why we are asking our members to contact their members of Congress to oppose the bill.
To which I responded:
Can you provide the studies or data please? It would help substantiate the claim.
Regarding the values dropping as a result of the middle-class paying higher taxes…..can you provide those studies too?
Thanks a million!
Jim Klinge, broker
While we wait for his data and studies that show the middle-class will be paying more taxes as a result of the tax reform and/or the costs will be placed on homeowners in high-cost states, specifically California, New York and New Jersey, here is how it is being reported today:
From the wapo:
But here’s the truth: 8 in 10 Americans will pay lower taxes next year, according to the nonpartisan Tax Policy Center’s analysis of the final bill. Only 5 percent of people will pay more next year. Mostly, those are folks who earn six figures and own expensive houses in places with high local taxes, such as New York and California.
From the latimes.com:
From the wsj.com
Middle-income households will get $61 billion in tax cuts in 2019 under the Republican tax plan poised for passage this week, according to an analysis released late Monday by Congress’s Joint Committee on Taxation.
That amounts to 23% of the tax cuts that go directly to individuals. By 2027, however, these households would get a net tax increase, because tax cuts are set to expire under the proposed law.
The calculations are based on JCT estimates of cuts going to households that earn $20,000 to $100,000 a year in wages, dividends and benefits. Those households account for about half of all U.S. tax filers, with nearly a quarter making more and a quarter making less.
The Trump administration has emphasized the benefits of the tax plan for middle-income households.
America’s most-affluent households, those earning $500,000 or more a year, which account for 1% of filers, would also get $61 billion in cuts in the first year, according to the JCT analysis. They would get a cut of $12 billion by 2027.
It doesn’t look like the middle-class will be negatively impacted in California. If only the affluent are affected because of the cap on state, local, and property taxes or the mortgage cap being lowered to $750,000, they can probably handle it and still want to buy a house in which to raise a family.
I just want the C.A.R. guys to stop saying prices are going to go down!
Here’s where they are saying today that there will be a short-term drop in property values of 6.3%, but they just state it as fact – I want to see how they came to these conclusions: