The ominous shadow the new Federal tax law looms over all of Northern Virginia and many other places as well. The new rules do not allow much of the mortgage interest deductions and deductions for property taxes. The cost of owning a home just became more expensive and so, less desirable. If we are homeowners, we will enter the New Year with less net worth than we had in 2017.
These deductions have supported American homeownership at least since the end of World War II. The world that most of us have experienced all our lives has changed and the changes will exist for the next three years under a national Republican government.
Our tax base will see a big drop similar to what happened after the Great Recession of 2008. If that weren’t enough bad news, the Federal workforce has already contracted by hundreds of thousands in just one year with more to come. Neither our tax base nor our Northern Virginia economy is going to be expanding for the foreseeable future.
Here in Alexandria we are about to enter a local campaign season. Beware of any politician who wants to promise economic expansion. It’s not happening. Instead we need a local government willing to economize, set priorities and approve only those capital improvements which are needed now. At the same time we need to support and protect as much as possible our lower income residents including immigrants.