Who Win and Lose under Tax Reform? Part II-Losers
- Posted on: Jan 19 2018
Losers
1. People buying health insurance. Some people who currently buy health insurance because they are required by law to do so. Under the new code, healthier people are more likely to drop their insurance, which is likely to make average insurance premiums go up.
2. Families Claiming Child Tax Credit. The new requirement that families claiming the child tax credit provide a Social Security number would cause a reduction in those claiming it. The children who are not in the United States would not be eligible, even if they were born in the US.
3. Owners of High-End Homes. Under current law, the interest on mortgage is deductible for the first $1 million of the loan. The reform cuts that to the first $750,000 and eliminates the deduction of interest on home-equity loan. This could drive down home prices, which is good for prospective buyers but bad for prospective sellers.
4. People in High Tax States. People in states like New York and California could be big losers, especially if they have high property taxes. Their ability to deduct their state and local taxes is now capped at $10,000.
5. The IRS. The tax collection agency has been underfunded and understaffed for years. Now the new tax rule will require upgrading its software, printing new manuals and explaining to confused taxpayers how things work.
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