High Tax States Reacting to Federal Tax Reform

Heh.

CHERRY HILL, N.J. (AP) — In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes. In Connecticut and New York, officials are exploring a switch from income taxes to new ones on payroll. A few governors have even called for tax cuts.

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In high-tax states, officials have been focused on protecting taxpayers from the impact of a new $10,000 cap on deductions for paying state and local taxes. In California, Connecticut, Massachusetts, New Jersey and New York, more than one-third of tax filers claim the state and local tax deduction on federal taxes; the average deduction in each state is over $15,000.

California state Senate President Pro Tem Kevin de Leon, a Los Angeles Democrat who is running for the U.S. Senate, introduced legislation this week that would allow people to make charitable donations to the state instead of paying income taxes. That would allow them to claim a charitable deduction on federal taxes.

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Another Democrat, New Jersey Gov.-elect Phil Murphy, announced a similar plan on Friday but said local governments also could implement it and apply it to property taxes.

If they drop income and property taxes and go to a voluntary donation system, then I’m all for it. It will be a great experiment to see how much money the people in those states really believe that they should be handing over to their state and local governments. If it is a “donation” that is required by law, then it’s just a tax by another name. Somehow, I don’t think these state elected leaders really want to make taxes voluntary. They know what would happen as well as I do.