Jul 12, 2017

Trump's tax-deduction plan is a GOP gamble

Carolyn Kaster / AP

A part of President Trump's tax plan has both Republicans and Democrats unsure of where to stand, according to a report from Bloomberg. The proposal to cut the state and local tax deduction has ups and down for both parties.

Republicans could benefit: Cutting the deduction could raise approximately $1.3 trillion over the next 10 years, "offsetting steep individual and corporate rate cuts Trump and Republicans are eyeing." Also, taxes would be shifted onto Democratic states like New York, New Jersey, and California.

But: This could have negative implications on citizens in their districts. Losing the deduction could "make standard deductions more attractive," resulting in a decrease of local home values. Bloomberg reported that home prices could fall by an average of 10 percent.

Democrats could benefit: If Republicans lose popularity due to the proposal, which is possible considering some of the vulnerable districts went blue during the 2016 election.

But, Democrats are stuck: Keeping the deduction as-is would mean they're "supporting a tax break for some of the wealthiest Americans," something they've normally argued against.

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