Middle-Class Suburban Homeowners Will Get Tax Hike Under Brady Bill

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WASHINGTON – A new analysis of the congressional tax plan finds that many middle-class homeowners will see their taxes go up as much as $6,167 next year, and rise by another $600 once the family flexibility credit expires at the end of 2022, according to data released today by Americans Against Double Taxation. These increases not only will hit suburban homeowners in New York, New Jersey and California, but also will cause taxes to rise in suburbs across the country including in Virginia, Minnesota, Utah, Pennsylvania, Ohio, Illinois and Michigan.

“The partial elimination of the state and local tax deduction (SALT) will raise taxes for many middle-class suburban homeowners even with the other changes included in the Brady tax bill,” said Bob Chlopak, Co-Director of Americans Against Double Taxation. “These tax hikes will hit both middle-class families and individuals owning homes, who have been promised for months they would get a tax cut, and will be as widespread as they are costly. The analysis makes it clear that these suburban homeowners are paying much of the $1.1 trillion tab resulting from the loss of the SALT deduction.”

The study of 39 suburban congressional districts using IRS zip code-level data may be the most locally-detailed analysis of the Brady plan so far. Individual and family taxpayers (married with two children) in every congressional district analyzed would face sizeable tax increases. Suburban middle-class homeowners near metropolitan areas – such as Los Angeles, San Diego, Minneapolis, Philadelphia and Washington, DC – will be among the hardest hit. Among the findings:

  • In 32 of the 39 districts, the average tax hike for homeowners who would see their bills go up is  more than $1,000. Once the family flexibility credit expires in four years, this average increase in 38 of the 39 districts would exceed $1,000.
  • The tax increases for homeowners are also widespread within congressional districts. Average homeowners living in more than half the zip codes in 29 of the 39 congressional districts will experience tax hikes as a result of the Brady plan.
  • Average homeowners in every single zip code in Paulsen’s district (MN-3) would face a tax increase, and those increases will run as high as $2,300.
  • California is one of the hardest hit states with middle-class tax increases as high as $5,559. In seven of the nine California districts analyzed, an average homeowner would face higher tax bills in more than half of the zip codes.
  • Middle-class homeowners in Pennsylvania will face tax hikes as high as $1,645. Three Pennsylvania districts will see tax hikes on homeowners across more than half of their zip codes.
  • Middle-class taxpayers who own a home in parts of Northern and Eastern Virginia will see their taxes increase by as much as $2,300.

Due to the partial elimination of SALT, the Brady plan causes taxpayers to be affected differently based on where they live, and suburban homeowners near major cities with higher costs of living are among the most likely to see their federal taxes go up.

Significantly, the Brady tax plan accommodates the same geographic differences for businesses by allowing them to fully deduct their state and local taxes among other expenses. However, for individuals and families, the Brady plan imposes a double standard by disallowing or restricting deductions for state and local taxes, and penalizes certain taxpayers based on nothing more than where people choose to live.

Individuals who own homes appear to be hit in larger numbers than families in these districts in large part because the Brady tax plan provides a new family and higher child tax credit.  However, the tax increases for families will increase significantly once the new family credit expires after 2022.

The tables below describe the results for each of the 39 districts examined.

Single Filers

State District Representative Percent of Zip Codes with Increases Average $ Increase[1] Highest $ Increase[2]

Highest % Increase[3]

CA 8 Cook 52.30% $478 $1,585 8%
CA 10 Denham 67.70% $494 $2,736 15.00%
CA 25 Knight 81.30% $537 $1,211 7%
CA 39 Royce 64.30% $554 $1,091 7.40%
CA 42 Calvert 40.50% $470 $1,520 9.90%
CA 45 Walters 85.30% $673 $1,836 15.60%
CA 48 Rohrabacher 42.90% $994 $4,893 61.90%
CA 49 Issa 76.30% $705 $2,289 16.10%
CA 50 Hunter 68.30% $504 $1,888 9.70%
IA 3 Young 54.40% $470 $1,942 9.70%
IL 14 Hultgren 38.60% $158 $789 3.60%
MI 8 Bishop 56.70% $215 $565 3.50%
MI 11 Trott 56.80% $201 $335 3%
MN 2 Lewis 69.50% $578 $2,174 10.30%
MN 3 Paulsen 100% $545 $1,257 8.20%
NJ 2 LoBiondo 65.60% $280 $1,696 15.40%
NJ 3 MacArthur 75.40% $308 $2,507 20.60%
NJ 4 Smith 80.00% $451 $2,011 33.80%
NJ 7 Lance 86.20% $523 $4,898 75.10%
NJ 11 Frelinghuysen 62.50% $502 $2,399 23.80%
NY 1 Zeldin 79.00% $623 $2,060 11.70%
NY 2 King 94.70% $646 $2,084 13.60%
NY 19 Faso 61.80% $521 $5,950 12.00%
NY 21 Stefanik 51.70% $511 $3,074 18.60%
NY 22 Tenney 60.80% $469 $1,486 8.00%
NY 23 Reed 68.10% $491 $2,778 13.10%
NY 24 Katko 63.70% $487 $1,474 6.10%
OH 10 Turner 27.00% $394 $998 5.60%
OH 12 Tiberi 34% $497 $965 6.40%
OH 16 Renacci 23.30% $477 $874 4.50%
PA 6 Costello 83.90% $299 $849 5.40%
PA 7 Meehan 50% $334 $894 8%
PA 8 Fitzpatrick 72.60% $323 $1,557 14%
PA 15 Dent 48.90% $283 $951 6.20%
PA 16 Smucker 40.30% $303 $711 8.30%
UT 4 Love 29.60% $368 $758 3.80%
VA 1 Wittman 73.00% $363 $1,293 7.80%
VA 10 Comstock 73.00% $440 $1,012 14.50%
WA 8 Reichert 11.80% $24 $69 1.40%

 

Married Filing Jointly (Two Children)

State

District Representative Percent of Zip Codes With Increases Average $ Increase[4] Highest $ Increase[5] Highest % Increase[6]

Highest $ Increase in 2023[7]

CA 8 Cook 18.20% $795 $2,204 15% $2,804
CA 10 Denham 14.70% $454 $1,078 7.20% $1,678
CA 25 Knight 62.50% $1,298 $2,500 108% $3,100
CA 39 Royce 57.10% $1,247 $2,349 85.10% $2,949
CA 42 Calvert 32.40% $898 $2,596 61.50% $3,196
CA 45 Walters 79.40% $1,462 $2,901 314.90% $3,501
CA 48 Rohrabacher 42.90% $1,550 $5,559 236.80% $6,159
CA 49 Issa 71.10% $1,260 $2,788 620.70% $3,388
CA 50 Hunter 58.50% $1,256 $2,239 57.80% $2,839
IA 3 Young 10.50% $458 $1,623 7.50% $2,223
IL 14 Hultgren 8.43% $646 $981 5.90% $1,581
MI 8 Bishop 6.67% $330 $707 4.10% $1,307
MI 11 Trott 9.10% $269 $558 3% $1,158
MN 2 Lewis 20.30% $608 $2,005 7.80% $2,605
MN 3 Paulsen 48% $946 $2,321 15.30% $2,921
NJ 2 LoBiondo 26.00% $874 $2,065 16.60% $2,665
NJ 3 MacArthur 39.30% $870 $3,701 113.10% $4,301
NJ 4 Smith 65.50% $1,253 $3,229 446.50% $3,829
NJ 7 Lance 74.70% $1,184 $5,846 1629.20% $6,446
NJ 11 Frelinghuysen 59.40% $1,333 $3,687 601.10% $4,287
NY 1 Zeldin 74.10% $1,047 $3,207 161.70% $3,807
NY 2 King 92.10% $1,028 $3,341 43.20% $3,941
NY 19 Faso 32.40% $1,073 $6,167 17.10% $6,767
NY 21 Stefanik 13.00% $1,082 $3,481 17.40% $4,081
NY 22 Tenney 9.00% $463 $1,098 6.70% $1,698
NY 23 Reed 15.00% $686 $2,593 10.70% $3,193
NY 24 Katko 14.10% $975 $1,635 8.50% $2,235
OH 10 Turner 7.90% $311 $768 4.40% $1,368
OH 12 Tiberi 10% $546 $1,251 5.30% $1,851
OH 16 Renacci 5.50% $206 $578 3.30% $1,178
PA 6 Costello 26.40% $660 $1,477 8.80% $2,077
PA 7 Meehan 20% $722 $1,645 10% $2,245
PA 8 Fitzpatrick 37.10% $749 $1,513 11% $2,113
PA 15 Dent 5.40% $165 $342 1.40% $942
PA 16 Smucker 5.20% $515 $1,193 4.00% $1,793
UT 4 Love 11.40% $1,067 $1,903 10.90% $2,503
VA 1 Wittman 43.70% $804 $2,168 11.10% $2,768
VA 10 Comstock 58.70% $1,291 $2,349 178.20% $2,949
WA 8 Reichert 8.80% $208 $491 2.80% $1,091

 

The analysis is based on modeling by the Government Finance Officers Association (GFOA) of the 2015 IRS Statistics of Income (SOI) which provides actual tax data down to the zip code level. Using this model, GFOA examined the taxes paid by both individuals and families of four who earned between $50,000 and $200,000 and own homes in these congressional districts, and compared their tax liabilities under current law with the Brady plan. To determine tax liability under the Brady plan, the GFOA model took account of its lower rates, higher standard deductions and child and family credits, the elimination of state income and sales deductions, and the cap on property taxes.  Importantly, one of the limitations of this analysis is that only aggregate and average data per zip code can be analyzed. As a result, taxpayers in many zip codes not counted in the above tables could still face tax increases, but are excluded from this analysis because the average individual or family would not face an immediate increase.

 

[1] Average of the zip codes with tax increases.

[2] Highest dollar increase among zip codes with tax increases

[3] Highest percentage increase in zips with tax increase

[4] Average of the zip codes with tax increases

[5] Highest dollar increase among zip codes with tax increases

[6] Highest percentage increase in zips with tax increase

[7] Highest dollar increase among zip codes with tax increases plus expiration of family flexibility credit