I'm not going to claim that I've reviewed this proposal in any detail or that I'm especially knowledgeable about tax law or the impact on various income groups. I don't know the ultimate fiscal impact, other than that it seems to add an inexcusable amount to the already obnoxious deficit. In the long term this could have dramatic inflationary consequences. Especially if the future government decides that the only way to pay off the deficit is to inflate it away.
I think neither party is fiscally responsible because the general electorate is not fiscally responsible. People want both more spending and more tax cuts. People want something today that they (or someone else) can pay for later. People (large groups) are not rational. I mean, we elected Donald Freaking Trump as President. How rational is that? Why would our politicians be any more rational? Because the learned and contemplative populace will listen to reason and logic? Hah. Some of us might calmly consider this complex subject, or we think we might until our own biases are tested. But those other guys, please.
On a few of the proposed line items, I have a first pass takeaway on the principle of it, in my opinion.
Mortgage interest deduction - this was always a benefit skewed toward wealthier people. While I can see a societal benefit to stable neighborhoods, and therefore to encouraging home ownership, there should be some limit. It has always made sense to me to cap that deduction at some reasonable level, whether regarding multiple homes or the value of the mortgage or a combination of both. This seems like a reasonable proposal to me. I haven't seen any note on inflation indexing for this, so it might be something that eventually disappears entirely due to the inflationary effects on home prices. The HCOL areas may find that this actually helps constrain those prices a little. The concern about rental properties is something I'm not sure is legit. Wouldn't the interest still be an offset to business income in that case? Just like any other expense related to running a business that reduces net profit? I'm no accountant, so maybe that's off base.
401K limits - again something that is effectively benefiting wealthier people. It probably should have been reduced, though not so far as that 2400 figure. This is one of those things where we have to reduce deductions someplace. This probably wouldn't actually affect that many people, considering how few contribute anything near the max. Remember that the guy (or gal) trying to support a family on 30k probably considers the Mustachian with a 500k IRA to be filthy rich. It's all relative. But this was politically untenable from the beginning because even people who don't take advantage would like to think they might.
Estate tax - I think the tax is morally wrong. Why should the government tax you for dying? Didn't they tax your income while you were alive? Didn't they tax your spending when you were alive? Didn't they tax your property when you were alive? Why do they get another bite just because the reaper visited? Because it's a convenient bucket of money for the rest of us? Because we can rationalize that it's only super mega rich that have to pay it? Seems wrong to me.
State income tax deduction - I think this deduction has had a diluting effect on the accountability of state governments. Why should the rest of the nation's taxpayers subsidize California or New York or Illinois bad government? We have our own bad governments to deal with, thanks. If the citizenry of NY doesn't want to pay for the services that NY is providing, then maybe those taxes will be lower. That said, property taxes are the same thing, and I'd expect a move toward more property taxes in these states, if this becomes law.
The corp tax rate to 20% - I see the argument for reducing the rate from 35%. I have friends who own small businesses and this is a real killer. It isn't just the mega corp with offshore tax havens we should consider. That said, do we really need to reduce it to 20% at the expense of ballooning the deficit? Can we maybe go with 27%? Combine this with eliminating all the (corp tax) loopholes and make it perhaps close to revenue neutral?
Charitable deduction - yes I agree that this will affect charitable giving. But doesn't anyone else sometimes feel just a little bit that the deduction kind of tarnishes the act of giving? Should we really be looking for a deduction for our good deed? The effect will be regrettable and so from that perspective it is maybe a bad idea. The US is the most charitable society on the planet. I'd hate for that to change.
The real shame is that we truly do need tax reform. Simplify the dang thing. It would make it much easier to then argue about how much government we want to pay for.