It’s frightening to realize you agree with Charlie Rangel about almost anything. But I completely agree with the Rangel-Angelides op-ed in this morning’s L.A. Times, titled The tax plan that cheats California:
MOST AMERICANS think tax reform should be about fairness and simplification. But for the right-wing ideologues who dominate tax policy decisions in the Bush administration, the goals are different. They want to shift the tax burden from the wealthy to the middle class and put pressure on states such as California and New York to shrink critical public services. The recommendations by President Bush’s Advisory Panel on Federal Tax Reform to eliminate the federal income tax deduction for state and local taxes, and to cap the deduction for home mortgage interest, are a big step in that direction.
Ignoring the rhetoric about “right-wing ideologues,” I think this is absolutely right. Make no mistake: no matter what you call it, this is a tax hike. What’s more, it hits citizens of California especially hard:
The Bush tax panel’s proposal would be especially hard on California and New York. Currently, one in every four Californians filing a federal tax return deducts their state income tax and property tax, as do an even greater percentage of New Yorkers. Eliminating the deduction would add an average of $2,200 to each of those Californian’s federal tax bills and $2,774 to each New Yorker’s tax bills. This amounts to more than $23 billion in new federal taxes that would leave California and New York and end up in Washington.
. . . .
The Bush tax panel has also taken aim at states such as New York and California with its proposal to cap the deduction for mortgage interest. The $411,704 cap is well below California’s median price, $568,890, for a single-family home. Around New York City, the cap would also be well below housing costs for middle-class families. But Texans purchasing a median-priced house would still be able to deduct all their mortgage interest. That’s unfair.
What’s more, this plan will cause countless foreclosures of homes owned by households that count on the deduction to make their payments. That will drive real estate prices down. The net effect: this plan will take a huge real-estate bubble and rudely pop it, rather than allowing it to gradually deflate.
As if we here in California aren’t getting screwed enough by the toll that illegal immigrants take on our economy, straining our health care and education systems. And now this.
These tax proposals from the Bush tax panel are a double-barreled blast aimed squarely at the middle class, especially in California and New York, which are powerhouses of the U.S. economy. The citizens and elected leaders of California and New York, including the states’ governors, must quickly and strongly oppose the tax panel’s ill-conceived proposals.
I absolutely agree — and this issue transcends partisan politics for me. At a time when Republicans have spent like tax money is going out of style, I will not tolerate a tax hike that slaps middle-class Californians like myself the hardest. I will vote for any Democrat opposing this plan who runs against any Republican that supports it.
And you can bet I’m not the only middle-class Californian who feels this way.