Many people are currently focused on the “tax cut” bills working their way through the national legislature. The House and the Senate each have different ideas about the best way to get tax cuts done, and these differences will have to be worked out in Conference Committee after each august body passes what it thinks is the best way forward.
I’m not going to debate who will benefit the most from these tax cut bills—notice they’ve dropped all pretense to tax reform. I’m not going to debate the merits of a plan everyone from Forbes to Gary Cohn call “trickle down economics,” although I will note that President George H.W. Bush is the one who dubbed it “voodoo economics” and my friend Matt renamed it “trickle on economics.” Even so, you might be interested in this article by Bruce Bartlett, who helped shape and sell the Regan-era tax cut philosophy.
What I want to talk about is one very specific part of the proposed legislation that will affect everyone in United States, whether you own a home or not. One of the ways Congress wants to offset the tax cuts is to close loopholes. As a rule, “closing loopholes” means raising taxes on a few under special circumstances, but not in this case. In this case only a few people will not feel the effect of “closing loopholes” as an increase in their personal income tax or as price increases that will be passed along to renters. Continue reading