About Tax Plan’s Outsized Hit on L.A.’s Economy

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President Donald Trump’s tax plan would likely have an outsized effect on business in Los Angeles if the bill passes with certain parts intact.

Trump’s current proposal trims federal deductions for home-mortgage interest and state and local tax payments. Both stand to hit Los Angeles – and much of California – harder than most places because home prices and state and local taxes tend to be higher here than in other parts of the country.

It’s likely that a move to cut deductions on interest payments for mortgages over $500,000 – that’s the version of the plan going around at the moment – will appeal in much of the U.S. as a soak-the-rich move in defense of the middle class.

It sounds different in Los Angeles, where the countywide median price on a single-family home is around $550,000.

Indeed, it’s safe to say that the deductions now on the chopping block would take disposable income out of tens of thousands of middle-class households in Los Angles.

Keep in mind that consumers account for about two-thirds of the economy, and the middle class is the key both nationally and locally.

Does anyone in the White House or the Republican Party’s leadership care about the outsized effect the tax plan could have on Los Angeles’ middle class?

It doesn’t seem so, and that makes some sense because Los Angeles and California have made it easy for politicians in other parts of the country to brush off our concerns.

Maybe we’re just overwhelmingly sold on the Democratic Party. Or maybe gerrymandering and political action committee money have tamped down competition in our politics, effectively locking Republicans out.

Either way, we could increase our political clout nationally – even with the heavy lean toward the Dems – if California abandoned the tradition of a winner-take-all system for the state’s presidential electoral votes and instead apportioned them by percentage. States under the U.S. Constitution have wide leeway to determine apportionment of electoral votes, and California could choose such a system.

Even a measly 30 percent share would give a candidate about the same number of electoral votes in a California loss as a win in Ohio, which is fawned over as a swing state every four years.

That would ensure incentive for both sides to show some concern about how our circumstances might differ from the rest of the nation in crucial areas – and why this broad brush of a tax plan might be wrong-headed.

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