A proposal to allow Californians to dodge a new cap on federal tax deduction would create “the most generous tax credits ever allowed in Californian history,” according to a new legislative analysis.
The legislation, Senate Bill 227 from Senate President Pro Tem Kevin de León (D-Los Angeles), would create a state-run nonprofit to accept donations from residents concerned about their federal tax liabilities under the GOP-led federal tax overhaul.
The federal plan caps the deductibility of state and local taxes at $10,000. De León’s bill would allow Californians to reduce their state income tax payments above $10,000 dollar-for-dollar by instead donating to the state what they owe, allowing residents to take a federal charitable deduction instead.
The bill analysis from the Senate Committee on Governance and Finance says that taxpayers, especially wealthy ones, would receive “benefits that exceed the amount contributed.”