Cummings Issues New Staff Report—The Republican Tax Bill: Punishing American Homeowners While Rewarding Real Estate Developers
Washington, D.C. (Apr. 17, 2018)—Today, Rep. Elijah E. Cummings (D-MD) released a Democratic staff report on the specific effects of the new Republican tax law on homeowners in Baltimore City, Baltimore County, and Howard County in Maryland.
“On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act, stating: “I consider this very much a bill for the middle-class.” That same week, he called the Republican tax law “an incredible Christmas gift for hardworking Americans.” No Democrats in the House of Representatives or the Senate supported final passage of the bill.
“In fact,” according to today’s report, “the Republican tax law imposes significant new financial punishments on middle-class American homeowners across the country, while essentially using the funds raised by these tax increases to help pay for lucrative new tax breaks for real estate developers.”
According to the report:
- None of the approximately 399,600 homeowners currently living in Baltimore City, Baltimore County, and Howard County will be allowed to claim deductions for interest on home equity loans they use for any purposes other than home improvement.
- Beginning in 2018, about 64,100 homeowners in Baltimore City, Baltimore County, and Howard County with existing home equity loans will not be allowed to claim full home equity interest deductions as they did in the past.
- Although 294,400 homeowners in Baltimore City, Baltimore County, and Howard County used to be able to deduct their full property taxes, about 149,300 no longer will be allowed to do so.
“Although President Trump and Republicans in Congress imposed sharp new financial penalties on middle-class American homeowners, they granted commercial real estate developers new tax breaks and loopholes worth billions of dollars,” the report states. “Under the new Republican tax law, real estate developers are now allowed to take new deductions on pass-through income, pay dividends that are taxed at reduced rates, enjoy an exemption from a provision that otherwise limits businesses from deducting interest, and utilize an exemption to avoid paying taxes on property exchanges.”
“President Trump and Republicans in Congress made a clear choice last year when they enacted their tax bill,” the report concludes. “They chose to take away longstanding tax deductions that middle-class American homeowners have relied on for decades while at the same time lavishing lucrative new tax breaks on real estate developers. Although President Trump, his family, and even some lawmakers who voted in favor of this legislation personally may reap huge financial windfalls from these changes, the result is just the opposite for many middle-class American families who have spent their lives faithfully investing in their single biggest asset—their home.”