Trying to save themselves from irate taxpayers who are about to get another blunt reminder about how high their state taxes are, California Democrats are toying with a brash scheme to skirt a new federal cap on state and local tax deductions.
The Mercury News reports that instead of paying taxes to the Golden State, Californians would be allowed to donate the money to the state’s coffers — and deduct the entire sum from their federal taxes. Sort of like a mandatory voluntary tax.
The hastily drafted proposal strikes back at one of the least popular elements of the GOP’s tax overhaul, one that hit California and other high-tax, high-cost states the hardest. It also promises to establish a new front in California’s famous anti-Trump resistance efforts, which last year took on immigration enforcement and environmental regulatory rollbacks.
“The Republican tax scam disproportionately harms California taxpayers,” said Senate leader Kevin de León, also a candidate for U.S. Senate, who plans to introduce the proposal this week. “Our hard-earned tax dollars should not be subject to double-taxation, especially not to line the pockets of the Trump family, hedge fund managers and private jet owners.”
California lawmakers are considering a tax credit of 100 percent for the proposal — essentially allowing people to replace their tax payments with donations to a state fund. Californians who choose not to make the donation would still be required to pay state taxes.
FYI, no one in Sacramento is even considering reducing state taxes.