CALIFORNIA — California lawmakers are worried about the impact of the federal GOP tax bill that was just signed into law. In order to fight the pain of the bill, the state may soon begin accepting “charitable” donations, if some state lawmakers have their way.
Senate President pro Tempore Kevin de León (D-Los Angeles), along with Senator Ben Allen (D-Santa Monica) and Senator Jerry Hill (D-San Mateo and Santa Clara), introduced legislation this week “to protect California residents from the targeted federal tax increases that were enacted in the GOP’s recent tax reform,” a press release from the lawmakers states.
SB 227 — dubbed the “Protect California Taxpayers Act” — would make it so taxpayers in the Golden State could make a “charitable donation” to the state, according to the lawmakers. In return, the taxpayer would receive a dollar-for-dollar tax credit on the full amount of their contribution.
Of the bill, de Leon’s office says:
Taxpayers will then be able to deduct their contribution to the Fund from their federal taxes, as they have historically done with their state tax payments. SB 227 is modeled after laws Senator de León authored in 2014 – SB 798 and SB 174, which provided tax credits on charitable donations made to state college affordability grants, like the Cal Grant program.
“The Republican tax plan gives corporations and hedge-fund managers a trillion-dollar tax cut and expects California taxpayers to foot the bill,” Sen. de León said. “We won’t allow California residents to be the casualty of this disastrous tax scheme.”
Sen. Hill said the legislation will “protect” Californians from losing money in the new tax plan.
The Los Angeles Times first reported on the proposal, noting that charitable donations remain deductible on federal taxes.
“Under the federal measure, residents can deduct $10,000 paid in state and local taxes from their federal taxes. The effects of the new cap would be deeply felt in many suburban areas of California where people typically pay more than that to the state and local governments. Through De León’s plan, the first $10,000 would be paid via regular taxes and people would have the option of making a charitable contribution to the state for the remainder,” according to the Los Angeles Times.