I want to start with a quick update on IRS identity theft that was reported after the deadline for the last column. The IRS has announced that it will continue and it will enhance its initiative to stop tax return fraud by continuing and increasing the sharing of electronic information with state taxing agencies, major tax preparation companies and others in the tax industry. In addition, in 2018, a 16-digit verification code will be used on a significant number of W-2 forms. The important thing is that the tax industry is addressing this problem. In the meantime, protect your information and carefully check your claims summaries and any medical billings.

On another subject, after the deadline for this column, the Trump Administration will release the details of its tax reform initiative. At this time, it is believed that it will call for the elimination of the income tax deduction for state and local taxes, including real estate taxes. For those of us in high-taxed states, like New York, the loss of a deduction for state and local income taxes and for real estate taxes could be significant for many residents who itemize, and will still itemize, notwithstanding the proposed doubling of the standard deduction.

When I first read this it seemed to me that this could have a significant negative impact on real estate prices, which I find interesting, since I always believed that the mortgage interest and real estate tax deductions were a matter of “social policy” meant to encourage home ownership. So does this mean that we should not use the tax code any longer for social policy? But then why continue the charitable deduction — that is social policy? Could it mean that a real estate tax deduction is no longer necessary to encourage home ownership — or that we don’t want to encourage home ownership, but then why continue the mortgage interest deduction? Or is it that we don’t want to encourage the ownership of expensive homes, or just not home ownership in high-taxed states?

At any rate, I contacted several real estate agents and brokers who confirmed that, in their opinions, it would depress real estate values. One broker believes that it will even pull people into the rental market and “discourage home ownership altogether,” and they referred me to the website of the National Association of Realtors for its views.

Here are some of its views (talking points) to think about as the tax reform negotiations go forward. Homeowners already pay 83 percent of all federal income taxes. Real estate values could fall 10 percent in the short run, and more in high-cost areas. First-time home buying in 2016 was at a 50-year low, so why do anything to discourage it? With a drop in real estate values, those with a small amount of equity in their homes could find themselves underwater on their mortgages. Stay tuned.

On a different subject, according to a recent CNBC report, consumer confidence is higher than any time since 2004. I am not correlating this with the fact that credit card debt is at an all-time high, but I can’t help but wonder. As I told students recently, when you hear about consumer spending, remember that ALL BUYING IS NOT THE SAME. I think of spending as spending your own money, money that you have earned or saved. Buying consumer goods with credit card or other debt, to me, is just buying. However, when they talk about consumer spending, they never make that important distinction, but you should.

For a final subject, recently, after a CARE Presentation at Alfred State, I had a conversation with two young men, who I believe were from families that were not originally from the United States. They wanted to know my opinion as to how it is that we could have become this “debt is ok” country. I told them that I thought that it was the confluence of several things.

In no particular order of importance or chronology, first, money flooded into the United States after several regional international economic collapses, when the world realized that, ultimately, they had to pay off their debts in U.S. dollars, so they had better have some in reserve. That required the financial and banking industries in this country to find creative ways to provide returns on investment, so we saw things like the securitization of credit card, car loan, and mortgage debt (packing them up into bundles for investors).

Second, the financial industry marketed and convinced Americans that “buy now, pay later” was OK, as we moved from a balance sheet to a cash flow concept of “affordability”. Previously you believed that you could afford something if you actually had the money to pay for it (a balance sheet — assets less liabilities — concept of affordability). Then we moved to, if you had the cash flow, even if it was because you went into debt to get the money, but you could service the debt, you could afford it.

Third, the United States Supreme Court decided that you could charge the lawful interest rates of the state where your financial institution was located, instead of rates of the states where you did business. States like Delaware seized on this as a way to bring jobs and economic growth into their state. They raised their interest rates, and financial institutions moved there, getting around the interest rates caps for consumer loans in many states, known then as usury laws. For example, in New York State, with some exceptions, like for mortgages, the rate was 9 percent. Now credit card interest rates can be 29 percent.

Lastly, Americans became less personally responsible when it came to debt. In prior generations, the idea of a radio commercial which says, “don’t let the credit card companies trick you into thinking that you have to pay back all of your credit card debt” would have been unimaginable.

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo