How might this happen? It stems from the new caps on the home mortgage interest and state and local tax deductions. Restrictions on building have pushed up the costs of housing in expensive coastal blue-state cities like San Francisco, Los Angeles and New York City. High income and property taxes piled onto exorbitant rents and mortgage payments amount to cost-of-living force fields that already deflect talented workers to relatively affordable red-state cities, like Phoenix, Houston, Atlanta and Charlotte, N.C.
The tax act’s ceiling on deductions is likely to make many blue-state metro areas even more expensive — at least in the short run.
With the Republican changes to the tax code, the high-cost dynamic that has effectively redistributed some probable Democratic voters from left-leaning to right-leaning states will be thrown into overdrive.