Question: Would San Diegans, on balance, benefit from the proposed federal income tax changes?
Phil Blair, Manpower
NO. As the legislation currently stands San Diegans and all Californians will lose their higher mortgage deductions, which are a result of our much higher cost of housing and deductions for our very high state income taxes. Residents of other states are primed to benefit much more than Californians.
Kelly Cunningham, National University System
NO. Capping mortgage interest, and eliminating state/local income, sales, and several other expense deductions certainly harms more expensive places like San Diego. California already subsidizes the rest of the nation, for every one dollar paid in federal taxes the state gets back about 80 cents. For the federal government to take even more taxes from California will further impinge the state economy. Taxes slow the economy, reduces wealth, reduces investments, reduces wages, reduces standard of living.
David Ely, San Diego State University
NO. For many residents, a lower tax rate will not offset the loss of some popular deductions. San Diegans pay high state income-tax rates so losing the state income-tax deduction will impact anyone who itemizes. Limiting the interest that can be deducted to $500,000 in mortgage debt and capping the deduction for property taxes at $10,000 will affect many new homeowners. As area home prices continue to climb, even more home buyers will be impacted.
Gina Champion-Cain, American National Investments
She is not participating this week.
Alan Gin, University of San Diego
NO. Because the income tax is so high in California, residents of the state benefit a lot from the ability to deduct those taxes before paying the federal income tax. Losing that deduction would cause the taxes of some Californians to go up. Also, because homes are so expensive, the interest paid by Californians is much higher than other states. So limiting the mortgage interest deduction would also hurt. The latter would pose a double whammy as it may cause home values to decrease.
James Hamilton, UC San Diego
NO. The proposal is to cut marginal tax rates and pay for it by reducing some deductions. Even if the plan is overall revenue neutral, it will mean higher taxes for some households (those who have bigger mortgage payments and higher state taxes) and lower taxes for others. House prices in San Diego and tax rates in California are well above the national average, so on balance this could mean higher federal taxes for many of us.
Gary London, London Group of Realty Advisors
NO. If you are seeking a new home in San Diego, and you are a high-income earner, this is a tax increase of major significance. The inability to deduct much mortgage interest, property taxes and state income taxes will be very impactful. If you are old and retired, and stay in your home, you win. Overall, I see this as a big, negative hit for many San Diegans who will be disproportionately hurt relative to persons not living in coastal California.
Norm Miller, University of San Diego
NO. Most residents in California will be seeing lower after-tax incomes, if all the proposed modifications go through. The loss of several exemptions and deductions, especially state and local taxes is a huge setback for us, even with the higher standard deduction. The tax credit “increase” (Thanks Ivanka) for children handles two weeks of child care, at best. The mortgage deduction limit could negatively impact many homes in the future, with our average single-family price now at $830K.
Jamie Moraga, IntelliSolutions
NO. California has the highest income tax rate and one of the highest median home prices in the country. San Diego is one of four metro areas in the U.S. where more than half of homes are priced above $500K. Capping mortgage interest deductions to $500K for new loans could limit first time homebuyers, prevent empty nesters from downsizing, and slow down new home purchases. Also, losing the SALT (state and local tax) deduction could increase the tax burden for Californians. Would the doubling of standard deductions counter balance the loss of these popular tax breaks in our state? We shall see.
Austin Neudecker, Rev
NO. This tax proposal would be worse for San Diegans, who will be affected by not being able to deduct our (relatively high) state income taxes. Anyone with, or looking to purchase, a home mortgage over $500K will lose part of their mortgage deduction and become subject to the new property tax deduction cap. More importantly, we are using these tax hikes on individuals to pay for huge breaks for large corporations in other regions.
Bob Rauch, R.A. Rauch & Associates
YES. The state will soon have the highest taxes in the U.S. for income taxes, state sales tax, vehicle tax and the gas tax. The Trump plan lowers the income tax rates, eliminates loopholes, preserves tax incentives for mortgage interest and much more. However, the proposal eliminates the deduction for state and local taxes hitting California’s wealthy taxpayers hard. It is time for California to enact its’ own tax reform and thank Prop. 13 for relief.
Lynn Reaser, Point Loma Nazarene University
YES. Significant numbers of higher-income households, especially homeowners, could lose from the scaling back or ending of important deductions. They could benefit from the planned phasing out of the estate tax. Most San Diego households will probably benefit from a doubling of the standard deduction and lower tax rates. Companies, their shareholders, and their employees should benefit from lower business taxes, which could also spur faster economic growth.
John Sarkisian, SKLZ
Is not participating this week.
Chris Van Gorder, Scripps Health
NO. I don’t think it’s a balanced approach to tax reform. Homeowners and not-for-profits would be effectively funding tax breaks to for-profit corporations. The limits on mortgage deductions is a real concern given the cost of housing in San Diego. And without tax-exempt bonds, it will cost millions more for local not-for-profit health systems to finance the rebuilding of hospitals required by state law. That additional cost will ultimately hurt everyone in our community who needs health care.
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