San Diego Housing Market News and Analysis
How does one start a petition drive for a CA state "tax reform" in lieu of SALT caps?
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Submitted by flu on December 20, 2017 - 6:41am
Does anyone know or have experience with starting a CA state tax "reform" petition? For example, recently there's a petition to repeal gas taxes... How does one setup/start a similar tax relief petition?
As you already know, with the federal tax reform, folks in high cost states such as CA, NY, NJ are going to be seeing their federal taxes change with the cap on state and local tax (SALT) deductions.
What I would like to do is get some state representative to sponsor a CA state tax reform bill such that CA state and local governments expand state "charitable organizations" and provide a near dollar-for-dollar state tax credit for contributions to "qualified" charitable organizations.
So for example, if you owe $1000 in state taxes, but donate $1000 to a qualified charitable organization(s), you get a $1000 state tax credit and owe $0 in state taxes.
In effect, this would shift the tax deductions of CA tax payers from SALT deductions (which is currently limited to $10k with it and property taxes) to "charitable contributions", which the federal tax code does not limit under both normal tax rate and (as an added bonus for folks that currently pay AMT taxes) does not get AMT limited (unlike SALT deductions which are also AMT limited)....
From CA state/local government perspective, they get relatively the same money, whether it's from a direct tax payment or from charitable contributions. But as a CA tax payer, this would get around the SALT cap. This might even allow the CA state to have net positive than previously, because for example, if they offered a 80-90cents to $1 tax credit:donation, a CA state tax payer might still opt that option, because they end up making up the different in the federal taxes they save....
This concept is not out of the realm as possibilities, because as SK pointed out on another thread, some states such as Arizona already have similar ideas in place, although there's a limit on the state tax credit...
I'd like to bring this up to at least some of our state/local government officials, at least in principal....as a way of giving the finger to some parts of the tax reform.....
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