California’s Democrat-controlled state government wants to re-classify state taxes as charitable contributions to avoid the new $10,000 cap on state and local tax (SALT) deductions in President Donald Trump’s new tax reform.
For decades, California Democrats have demanded higher and more progressive tax rates as a social justice cure to address income inequality. But they are appalled that President Trump’s Tax Cuts and Jobs Act progressively hurts the state’s highest income earners by capping SALT deductibility.
Gov. Jerry Brown called limiting SALT deductibility to about an upper middle-class income level as “evil in the extreme,” and hissed at Trump’s Republican allies for “acting like a bunch of Mafia thugs.” California Senate President Pro Tem Kevin de León (D-Los Angeles) snarled, “Republicans in Washington have once again zeroed in on California to punish us and make our state the single biggest loser in their reckless tax scheme.”
California is the most populous state, but only has the fourth-highest percentage of residents that claim SALT deduction, at 34.5 percent. The Golden State’s “per-filer” average SALT deduction is a middle-class $12,682. But due to rich coastal and multi-property owners, California has the highest “per claimant” SALT deduction of any state, at $36,802. For California’s rich, tax reform means an effective increase in state taxes. – READ MORE
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