Legislation

New California bill could serve as national model for skirting Trump’s tax law

A California Senate leader on Thursday introduced legislation aimed at circumventing a central plank in the new Republican tax law, introducing a model that – if successful – could be replicated all over the country.

California Senate President Pro Tempore Kevin de León, D, introduced a bill that would allow taxpayers to make a charitable donation to the California Excellence Fund instead of paying certain state taxes. They could then deduct that contribution from their federal taxable income.

The bill is meant to completely upend part of the tax law congressional Republicans pushed into law last year. That law contains a provision that sets a new cap of $10,000 on the amount of state and local property and income taxes that can be deducted from federal taxable income. De Leon’s office said that one-third of all taxpayers, roughly 6 million people, itemized deductions on their tax returns and claimed an average of $18,438 for state and local taxes.

De Leon’s bill, if it became law, would essentially allow Americans to deduct much more than the $10,000 limit by redirecting state tax payments into a type of charitable contribution that eventually was later redirected to the state. The new federal tax law, which was only supported by Republicans, went into effect in January and does not include any caps on charitable deductions.


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