Posted on 01/04/2018 7:00:39 PM PST by Cheerio
The latest notion by the Trump Resistance: Turn state tax bill into a charitable contribution to get around Republican tax law.
Sacramento
I’ve routinely slammed California’s Democratic leaders for their plodding lack of creativity in dealing with the state’s many crises. Pick a problem (infrastructure, poverty, housing, etc.) and they have the same basic solution: Raise taxes, expand a bureaucracy, and give the government more power and money to “do something.” It would never dawn on them that the biggest problems are in the areas where they’ve intervened the most.
But it’s time to give credit where it’s due. Their latest ploy to derail the recently passed Republican tax law may be indicative of the leadership’s unhealthy obsession with the Trump administration, but it does display a remarkable level of creative policymaking. It’s bad news, but it must have taken some real thought to concoct the scheme. The idea is to rename state tax payments as “charitable contributions” to get around new limits on state tax deductions.
Spectator readers know about the many advantages of the GOP tax bill, which lowers tax rates and is likely to give the economy a boost. They also know about its disadvantages. Namely, it will increase the federal deficit given that no one — from either party — ever tries to cut federal spending. For those of us living in high-tax states, it also has the disadvantage of capping our state and local tax deduction at $10,000 rather than an unlimited amount. The average deduction was $22,000, reflective of the highly progressive nature of the state’s tax system.
(Excerpt) Read more at spectator.org ...
The IRS just rules that mandatory charitable deductions are taxes, and ignore what California calls them. Should be a simple agency ruling and any court would back them.
Welllll, it seems that these CA bureaucrat-extremist-socialist-communists forgot the minor fact that NO CA government agency or city or county is a 501C4 organizations with a 501 Federal Tax permit.
No IRS permit from Washington, no charitable deduction from the IRS for 2018, 2019, 2020, 2021, 2022 .....
I can’t imagine any sane person seeing it any differently than you stated there.
If you’re compelled by government to donate it’s not a “charity”.
These bastards want to add tax fraud to their many crimes. For how long can we survive with state governments based on illegality?
Yes, I would expect they would get crushed immediately on a substance over form ruling.
If it’s truly voluntary they might have an argument. Otherwise no chance.
Exactly, beat me to it.
Was thinking State deduction?, but then that would make no sense giving a portion of the money back, then spending the remaining on a new tax office expansion.
But then again....it is California
It appears to me that the IRS will just announce that the money “given” to citizens by California in trade for mandatory “charity” will merely be declared additional income same as state refunds are now.
> Will the FED IRS allow this for California 2018 Individual 1040-Sched A returns?
Exactly the problem...it only qualifies for charitable deduction if the Feds grant 501(c)(3) status to the organization. Do we really expect the IRS to do so for California tax payments? Not a prayer.
If California really cared about its citizens, they could lower their taxes...but they don’t care about them and only care about illegals.
Of course their tax ideas are nuts, so are their spending ideas, that’s why they have to tax so much.
That's a pretty easy concept for those on FreeRepublic, but for others, even Supreme Court Justices, can't seem to figure it out.
Tax fraud is an arrestable offense, and encouraging others to engage in tax fraud is also arrestable. If the politicians pass a law that designates taxes as charitable deductions, and then urge their citizens to tell the IRS that they are charitable deductions, they need to be jailed.
Works just like obozocare penalties are not a tax.
The REAL tax fraud was perpetrated by limiting the SALT deduction which had been unchanged for 105 years.
I expect a successful SCOTUS challenge and millions being paid/refunded to defrauded taxpayers.
Now THAT will be a deficit-booster and a half.
The IRS has always considered non-tax or fee, pure donations/contributions to State and Local governments to be charitable contributions.
I’ve never heard of a ‘mandatory’ charity. Renaming taxes a charity would make them volunary.
The state and lenders issue tax statements at the end of the year showing property taxes paid. If they make the amount over 10,000 a charitable deduction they will be puting their fraud in writing. The property tax bills are public information and required or you lose your house.
Property taxes are impounded with many people’s house payments. So now the bank impound “charitable deductions. I think they may violate federal lending laws. This is going to be popcorn worthy.
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