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Bill Proposal to Sidestep Federal Tax Overhaul Would Create ‘Most Generous Tax Credits’ in State History, Analysis Says

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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.

Senate President Pro Tem Kevin de León (D-Los Angeles) authored a state law proposal that would sidestep the federal tax overhaul. (Credit: Mel Melcon / Los Angeles Times)

Senate President Pro Tem Kevin de León (D-Los Angeles) authored a state law proposal that would sidestep the federal tax overhaul. (Credit: Mel Melcon / Los Angeles Times)

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.”

Read the full story on LATimes.com.