House Minority Leader Nancy Pelosi visited Rep. Jamie B. Raskin’s Maryland congressional district Saturday morning, ground zero for affluent homeowners who could take a financial hit under the House Republicans’ tax plan.
Pelosi stood on a North Bethesda elementary school stage in front of supporters holding signs that said, “Save the middle class,” “Stop the GOP tax plan” and “#Billionairesbudget.”
Raskin’s district is one of three in the capital region — along with districts in Virginia represented by Reps. Gerald E. Connolly (D) and Barbara Comstock (R) — that share a dubious honor: a higher percentage of residents who claim the state and local income tax deduction than anywhere else in the nation, according to Government Officers Finance Association data.
The benefit is one of several that would take a hit under the GOP plan unveiled last week, a top priority for President Trump and House leadership.
All three districts are home to lots of highly educated, two-income households and pricey real estate, economically and culturally distinct from much of the nation’s heartland.
Despite their shared socioeconomic markers, residents and politicians in the Washington suburbs are generally split along political lines when it comes to the complex tax plan.
Republicans are taking a wait-and-see approach to the plan, saying they hope it will simplify the tax code and jump-start the economy, while Democrats have accused GOP leadership of corporate giveaways reminiscent of trickle-down economics.
Finance executive Mitch Sproul, a self-described fiscal conservative from Loudoun County, said cutting deductions for state and local tax and mortgage interest could hurt his wealthy neighbors — “and that’s not all bad.”
“By and large I really think it’s a good bill,” he said. “If we have any shot at compromise and tax reform-slash-tax cut done on Capitol Hill, the bill is going to have winners and losers.”
Sproul said he believes deep cuts in the corporate tax rate called for in the plan will spur growth, while tax increases and eliminating loopholes are necessary to keep the plan from busting the deficit. As it is, it would add $1.49 trillion to the national debt, experts say.
Sproul, a Comstock supporter, said he would be surprised if the congresswoman didn’t ultimately back the bill, which he said is a much-needed victory for a party hamstrung by its inability to overhaul the Affordable Care Act.
Comstock voted last week for a budget resolution that set up the framework for tax reform to pass the Senate with 50 instead of the usual 60 votes, but has not said whether that signaled her support for the tax proposal.
About 49 percent of residents in Comstock’s, Connolly’s and Raskin’s districts take the state and local income tax deduction, according to the 2015 report from the Government Finance Officers Association.
The economic profile of Comstock’s Northern Virginia district resembles that of wealthy districts in New York and New Jersey. Yet unlike her GOP colleagues in those blue states, she has not taken a hard line against the bill.
Comstock, who is seeking a third term next year, said Friday that she and her staff are still reviewing the current proposal and welcome input from constituents.
“Making our tax code more pro-growth and pro-family and providing tax cuts for our businesses and our hard-working families has always been a priority of mine,” she said in a statement.
She supports parts of the bill that lower business and personal tax rates and introduce new tax brackets as well as lower corporate tax rates and incentives for new capital investments.
Yet for those tracking the real estate market, the proposal sounded alarms.
Bob Adamson, chairman of the board of directors of the Northern Virginia Association of Realtors, was at the national Realtors Conference & Expo in Chicago when the plan was announced.
“We’re a little shellshocked because there’s even worse impact than we initially thought in this package,” he said. “We see it as a giveaway for corporate America at the expense of regular American taxpayers, including homeowners.”
But Vicky Chrisner, a Realtor who works mostly in Fairfax and Loudoun, said she is skeptical that changes to deductions would suppress the housing market. Low interest rates keep sales robust, she said.
“I don’t think it will be nearly as impactful in our area than the hype would have you believe,” she said.
Connolly, a former chairman of the Fairfax Board of Supervisors, said the plan could have significant consequences for residents of his congressional district, whose high government and professional salaries cannot compare to that of Wall Street CEOs.
He called the tax plan a “financially irresponsible” return to the “trickle-down philosophy that has been proved a failure during the Reagan years and of course during the Bush years.”
On Saturday in Maryland, Pelosi and Raskin cast the budget as a gift to corporations and the wealthy.
“You know how you can’t deduct your state and local taxes? Corporations still can,” she said to groans from the audience.
Trump has set a Christmas timetable for passage of the tax reform legislation.