California finds a way to Screw the Rest of the Country out of Taxes If Republicans were to pass the Fair Tax, it would prove that they are smarter than Democrats.

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Jan 5, 2018 No Comments ›› admin

By Lynn Woolley

The Republicans put up a brilliant tax bill in at least one aspect.

They created a situation where low-tax states that generally vote Republican benefit from tax cuts while predominantly Democrat voters in high-tax states have to pay their fair share.

California may have come up with a way to negate that effect.

Since Californians could deduct their outrageously high state and local taxes, the entire nation has had to make up the difference. 

That’s because in low-tax states like Texas, we can’t deduct as much – so we send more taxes in to the feds. So California is about to set up a charity that will allow taxpayers to take the portion of their state taxes over $10,000 – and donate it to the state. Since the state is setting it up as a charity, it’s deducible again. So once more, Californians will keep tax money in their state that should go to Washington.

This is a legal (though diabolical) way to get around the new tax law.

Let’s be clear. If you live in Texas (lower taxes), you don’t have as big a deduction under the old law. So you pay higher federal taxes. If you live in California (higher taxes), you had a huge deduction under the old law – meaning you sent more of your taxes to Sacramento, and far less to Washington.

One thing the new tax bill did was to correct this injustice. Why in the world should people in Texas have to pay higher federal taxes than people in California? Californians may have been paying the same general percentage of their income – but under the old rules, California benefited because the tax money stayed in-state.

Republicans were quite aware that if the deduction for state and local taxes were capped – say at $10,000, it would penalize high-tax states typically run by Democrats. And well it should. The State of California taxes its people until they bleed – and the federal tax laws should not allow them to reap a benefit that amounts to screwing the low-tax states.

State Senate President Pro Tem Kevin de Leon came up with an easy fix.

Kevin Alexander Leon, known professionally as Kevin de León, aims to skirt the new Tax Bill in Callie. Photo” Rich Pedroncelli – Associated Press,

First, you set up a “charity” and you name it the “California Excellence Fund.” You set it up so that donations are fully tax deductible.

Then, you pass a law called the “Protect California Taxpayers Act” to allow residents to NOT pay state and local taxes over $10,000 so long as they donate that same amount to the new “charity.”

Bingo! Once this is done, Callie taxpayers are right back where they were on taxes – no better off, but no worse off. But since the new “charity” is essentially the State of California, the donated money stays in-state just as it did before the new tax law.

How can they do this?

Easy! They can do it because states do it all the time. Charitable donations have long been a way to skirt taxes. And Republicans could not get rid of the charitable donation tax exemption because of lobbyists (the Swamp) and because of how “popular” it is.

Excuse me for saying so, but if de Leon (who is running for U.S. Senate against Dianne Feinstein) gets his way, then tax-and-spend Democrats will have outsmarted Republicans yet again. They just tricked the GOP into assisting them in electing a left-wing senator in Alabama. We’re better at making America great again – but they are far more devious when it comes to politics.

There is an easy, two-word fix.

If you want to Drain the Swamp, install a totally justifiable tax system, and defeat slimy Democrats, you go with the Fair Tax.

Under the Fair Tax, the Swamp is pretty much out of the picture, the IRS and the Tax Code are abolished, the 16th Amendment is repealed, the poor get a pre-bate, and the rest of us pay taxes based on how much spend rather than how much we make.

If the Republicans were to pass the Fair Tax, it would prove that they are smarter than Democrats. As things stand now, California Democrats appear to be smarter – and least as far as keeping their tax dollars in their own state and screwing the rest of the nation.

lynn@BeLogical.com

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