There are easier ways to help state taxpayers after federal tax reform
With great weeping and gnashing of teeth, California Democrats have excoriated the Republican-controlled Congress and President Trump for the passage of the recently enacted tax reform measure.
You wouldn’t know it from mainstream media rhetoric, but most Californians will be better off from the legislation due mostly to the reduced tax rates and a near doubling of the standard deduction. Nonetheless, some higher-wealth citizens might pay slightly more because of the $10,000 cap on state and local tax deductions. This is particularly true for those who pay high income and property taxes.
Whether it’s a legitimate effort to help those few Californians who may be disadvantaged by the new federal law or just another scheme to demonstrate anti-Trump street cred, Democrats are trying to find ways to neutralize or counter the higher taxes on the state’s well-to-do. (And here we thought Republicans were the party of the rich).
One strategy is to find a way to convert the deduction that Californians currently take for state and local taxes into some other deduction recognized by the IRS. Specifically, and a proposal just announced by California state Senate Leader Kevin de León, is to allow tax filers to make “charitable contributions” to the state.
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