Homebuilders and Tesla Sink After Detail of GOP Tax Plan Released

Tesla suffered its worst percentage day ever and homebuilders took a dive on news that energy credits would vanish and mortgage tax breaks reduced under the new GOP tax overhaul.

Homebuilders and electric car producers were hit hard today by GOP tax reform proposals.

The lead-in image above is from the CNN article Homebuilder Stocks Rocked by Tax Reform Plan.

Mortgage Interest Deduction Reduced

The bill preserves the mortgage deduction for existing mortgages. But going forward you can only claim a deduction for interest on mortgage debt up to $500,000, down from $1 million today.

The Tax Policy Center estimates the percent of filers who claim the mortgage interest deduction would fall to 4% from 21% because of the higher standard deduction.

Energy Tax Credits

The bill will repeal electric car credits. Shares of Tesla were hit with the biggest decline ever.

Bloomberg reports Tesla plunged as much as 8.9 percent to $292.63, the lowest intraday since May 4. Mike Bishop, a Michigan Republican on the House Ways and Means Committee, told reporters his assumption was that the credits would be phased out immediately.

Those tax credits amount to as much as $7,500 per vehicle.

Flatter Tax

The tax overhaul is a step in the right direction. It would be better yet if the mortgage deduction vanished instead of being reduced.

I favor a small flat tax coupled with a consumption tax (not a VAT) on everything excluding food and medicine, and possibly cleaning supplies and clothing articles below a certain cost.

Everyone would be treated the same, and my proposal protects lower wage earners who tend to spend every penny on food and essential items.

Mike "Mish" Shedlock

No. 1-15

very disappointed to not hear about any elimination of corporate tax credits and deductions. for years the GOP said lower rates would go hand in hand with elimination of deductions and credits


Mntgoat - Prop 13 protects a home owner from run away assessment value. Without that amendment to the Cal. constitution we would be paying 3 times the current assessed value. How can you want that?


@ Carl_R Daniel Webster said, "The power to tax is the power to destroy." Webster, in arguing McCulloch v. Maryland, said: “An unlimited power to tax involves, necessarily, a power to destroy,” 17 U.S. 327 (1819).
In his decision, Chief Justice Marshall said: “That the power of taxing it [the bank] by the States may be exercised so as to destroy it, is too obvious to be denied” (p. 427), and “That the power to tax involves the power to destroy … [is] not to be denied” (p. 431).
SUBJECTS: Taxation


Any type of consumption tax or VAT is grossly unfair to retired people that have already paid heavy income tax to scrape together some savings and now would have to have that heavily taxed money taxed again to buy things.


I'm very pleased to see the BEV subsidy go away. Those of us that don't want BEVs should not have to help buy them for others that do.