As Republicans in Washington work to combine their tax bills into one, economists and tax specialists on the West Coast are adding up the ways that the changes could hurt California.
Among the most publicized is the capping of the mortgage interest deduction, which could make buying a home in California even less affordable than it is now. The abolishing of deductions for state and local taxes, which could sharply raise Californians’ tax bill, is another.
“I’ve never seen anything like this,” said Gonzalo Freixes, a tax expert at the U.C.L.A. Anderson School of Management. “It could have spiraling consequences — the economy, the real estate market, revenues to local governments — it goes further and further into things where it could have a negative impact.”
But the sweeping tax bill extends well beyond headline changes.
The House bill called for the elimination of the tax credit for electric vehicles, a potentially big blow for Tesla, which has large manufacturing facilities in California.
Under the Senate bill, single filers earning $160,000 to around $200,000, of whom there are many in coastal California, would see their top marginal tax rate increase to 32 percent from 28 percent.