December 28, 2017

Republican Tax Plan: Screw You, Blue States!

Everyone hates paying taxesThanks to Burbed reader Real Estater for suggesting this as a topic for discussion.

Let’s review the many ways the new tax plan is gunning for Silicon Valley, Hollywood, SF, and all the engines of prosperity California provides.

By limiting SALT (that’s State And Local Taxes) deductibility to $10,000, every homeowner who bought more recently than 1987 just got a kick in the Schedule Effing A. And with that top bracket of 13.3% the most compensated will notice a corresponding Federal tax increase as well.

Next, what will this do to real estate prices? Only $750,000 of mortgage is now deductible. What can you get for around $950,000 (assuming a 20% down payment) in the Bay Area? Certainly not the luxury homes the angrybois on social media imagine. Maybe a crapbox in South San Jose? A condo in Santa Clara? A sleeping bag under the porch in Menlo Park?

And what will happen when the powerhouses of the US economy start fizzling as blue states start having serious budget issues?

There’s plenty to discuss, so have at it.

Comments (14) -- Posted by: madhaus @ 6:31 am