NEWPORT BEACH, CA—Some experts say the plan passed by the House earlier this month was carefully constructed to penalize Americans who live in Democratic-leaning states including California, Landmark Capital Advisors' managing director Adam Deermount tells GlobeSt.com. We spoke with Deermount about the proposed tax plan, how it would affect homeowners and what would happen to Prop. 13 if the plan passes.

GlobeSt.com: Could the proposed tax plan put pressure on Prop 13?

Deermount: Generally speaking, people respond well to incentives—especially when those incentives have economic consequences. So do governments. If you want more of something, make it more economically advantageous. If you want less of something, do the opposite. If the current Federal tax-reform proposals pass, Washington, DC, is ultimate telling high-tax states exactly what they want.
David Dayden wrote about this issue in an op-ed in the Los Angeles Times recently. He said, “The federal tax plan, introduced by House Republicans last week”—the plan since passed the House”—was carefully constructed to penalize Americans who live in Democratic-leaning states. It would repeal the state and local tax deduction, which 1 in 3 Californians use. And it would cut in half the deduction for mortgage interest, capping it at $500,000 for new loans. This change would hardly affect most of the country—less than 3% of all homeowners carry over half a million in mortgage debt—but it would bite places like New York and California hard because of their expensive real estate markets.