For example, the legislation seems likely to eliminate deductions for interest on mortgage loans larger than $500,000 — something homebuilders have opposed. And while Home Depot executives discounted the impact, the stakes are high if they are wrong, since the $100 billion-a-year company’s business relies on a healthy housing industry.
Local homebuilders also aren’t panicked about that change in the tax code, but it’s not popular.
While the revision would hit only the high end, nothing that dampens the housing market is good news, said Terry Russell, the CEO of FrontDoor Communities, a large metro Atlanta builder. “I would like to leave it alone, frankly,” he said. “There are a lot of higher-priced executive homes being built right now in Atlanta. And I am building them.”
It could also damage household finances and the larger economy, he said.
“A good portion of people’s personal wealth is in their home,” Russell said. “If you compromise their investment, you compromise their ability to build wealth.”
Even more threatening is a proposal to cut the deduction for state and local taxes — which add to housing costs in desirable neighborhoods. Taking away the deduction effectively raises prices even more, Russell said.
“That starts to affect the purchaser’s decision,” Russell said. “That affects — not just people buying the more expensive homes — that affects everyone.”
There are other ways the tax change could hit housing.
Current law lets children who inherit a family house off the hook for what might be a huge rise in its value over the decades. But if Republicans make good on their promise to cut or eliminate estate taxes, heirs might lose that benefit, too, said Chris Smith, an accountant and owner of CB Smith & Associates in Cumming.
“That’s a little pothole we could hit,” he said.
It’s not just about housing, of course. Some tax proposals are also fuzzy about how much income earned by a small business owner will be subject to what is known as the self-employment tax, Smith said. “There are some ‘gotcha’ elements in there that make me nervous,” he said. “If you meet certain guidelines and 100 percent of your income is subject to the self-employment tax, that would be a pretty big hit for small businesses.”
But those details are not clear, he said. “I could be looking at a tax increase.”
Nearly half of the nation’s workforce is employed by small businesses, and that should be a basis for any tax changes, said Daniel Blackman, a partner in the consulting company Social Karma.
“I’d like to see that small business is protected,” Blackman said. “Don’t remove the tax deductions that are benefiting people.”
Anything that undermines the entrepreneur as an individual will make it harder for small business, he said. “As a small business owner,” Blackman said, “I’d prefer that they not eliminate the $4,000-per-person personal exemption.”
But big organizations are also crucial — and some of the biggest say they need help competing globally.
For instance, Sandy Springs-based UPS is enthusiastic about the proposal to cut the corporate tax rate to 20 percent.
The company now pays an effective rate of roughly 34 percent — which in some cases is more than three times that of German-based competitor DHL.
The company says its own fortunes are entwined closely with those of the economy as a whole, since prosperous businesses ship more goods.
“A tax reform bill that permanently — and immediately — lowers the corporate rate will lead to GDP growth,” UPS CEO David Abney said. “We, as a business community, need to stick together and recognize that when the economy grows, businesses of all sizes and across all industries grow as well.”
But one huge slice of the economy — especially in Atlanta — is health care. And a key part of the Republican-backed bill that passed the House of Representatives eliminates the tax exemption for what are called private-activity bonds, including those for hospitals.
Those changes would “hamper our ability” to get financing, said Candice Saunders, the president and CEO of WellStar Health System, which has 11 hospitals and more than 250 medical offices in the state. “If this bill is passed, it could cost WellStar $30 million a year, dramatically impacting our ability to reinvest in the communities we serve and fulfill our mission as a not-for-profit health system.”
An additional concern is the repeal of the mandate for health insurance, she said. Take that away and millions of people will end up without coverage — and those people still get sick.
In the past fiscal year, more than 10 percent of the care provided by WellStar went to those without health insurance — $648 million in unreimbursed care, according to the healthcare system.
Among Atlantans with high incomes and investments, lower tax rates are welcome, but paying for them with trillions of dollars in new debt is not, said Andy Murphy, a partner at GENCapital, an Atlanta-based investment adviser.
“All my baby boomer clients watch what happens with national debt and half of them have a ‘national debt clock’ on their computer screen,” he said. “They don’t like that.”
It would be good if the law had a “trigger” that would reverse tax cuts if they don’t produce the economic surge that proponents promise, Murphy said. “If the rabbit doesn’t get pulled out of the hat,” he said, “I’d like to see some effort to start knocking the debt down.”
Barry Flink, a co-founder of the consultant firm Flex HR, goes even further in dismissing the tax bill.
“I think it’s meaningless and irrelevant,” he said. “I am concerned more with the proposers than the proposals.”
Flink, who has founded a number of companies, said he is worried about the hyperpartisanship of government. And he doesn’t like dependence on income taxes at all for funding — he’d prefer a system based on a consumption tax.
In any event, he doesn’t think it makes sense to make taxes a large part of strategic decisions. “I don’t ever consider it in running my business,” Flink said. “When you are operating your car, do you worry about some part that might go bad?”
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Staff writer Tamar Hallerman contributed to this article.