The Republican tax overhaul plan will hurt local governments, homeowners, and at least 50 percent of Massachusetts taxpayers through its changes in federal deductions for state and local taxes and mortgage interest — and by causing changes in the bond market, according to the organization that represents the state’s cities and towns.
Geoff Beckwith, executive director of the Massachusetts Municipal Association, said the Republican proposal would increase the federal deficit by $1.5 trillion and mark an end to a 104-year period in which the value of state and local taxes was deductible.
“It is abundantly clear that this tax bill will not work and will make our cities and towns actually weaker,’’ Beckwith said. “The plan is short-sighted. It is trying to engineer federal tax policy through a partisan lens” that rewards states that vote Republican while punishing Democratic states like Massachusetts.
Beckwith said the proposed changes in deductions for state income taxes, for property taxes, and for mortgage interest will cost Massachusetts residents thousands of dollars annually and will undermine municipal budgets, which generally get 50 percent of their budget though property taxes.
He also noted that the plan would cause changes in the municipal bond market that will affect the bonds used to restore historic buildings and the bonds used to attract private investment to a local community, two tools local leaders use to rejuvenate struggling communities.
“This is supposed to be about job creation,’’ Beckwith said. “It would actually make it harder for communities to do economic renewal . . . and development projects.”
Markey was also pessimistic about the effect the Republican plan would have on local budgets, support for transportation improvements, the fight against the opioid crisis, and the financial health of the health care and education institutions critical to the state’s economy.
“It’s the Massachusetts Massacre,’’ Markey said of the Republican plan that will also add $1.5 trillion to the federal deficit while providing massive tax cuts to billionaires and millionaires.
“This tax scam leaves average American families fighting for only about 20 percent of the [$1.5 trillion] relief,’’ Markey said. “That is not tax relief. That is tax deceit.”
Changing deductions for property taxes will “create tremendous pressure on cities and towns to raise revenues in order to provide essential services for their residents,’’ Markey said.
Markey said the Republican-controlled Congress is pushing ahead at unnatural speed and is refusing to hold hearings on the proposal, accept advice from experts, or allow congressional opponents to propose reasonable changes to the plan.
He said he expected Republican lawmakers who represent high-income communities with high property taxes to rebel against the proposal, a internal struggle that might grow strong enough to kill the plan, as happened with efforts to jettison the Affordable Care Act this year.
“I think they are going to run into very choppy waters” in the House, he said.
In the Senate, he said, he was hopeful that some Republicans would side with the Democrats and vote against it, denying it the majority it needs. He noted that two Republicans, Arizona Senator Jeff Flake and Tennessee Robert Corker, have been harshly critical of President Trump and against increasing the federal deficit.
Markey said it’s incumbent on Democrats and nonpartisan opponents to make their opposition known to their congressional representatives in hopes the Republicans will revisit their plans.
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