Posted on by Californiacontrarian

Think Again

A horse with blinders is supposed to run straight. If that horse were to consistently veer to the left, then one would think that there is something wrong with the blinders. However, here in California the Democratic politicians seem to consistently wear blinders that cause them always to veer to the left. The latest nonsense that is coming from the lefties in Sacramento is in response to the new tax laws which limit SALT deductions to $10,000. Of course, the Sacramento Legislature is in a state of panic, as over the course of the next year many Californians are going to realize that most of the the pound of flesh that they had been forking over to Sacramento in the form of high California state taxes can no longer be claimed as a deduction on their federal taxes.
What to do?

Seemingly, there are five options for the politicians:
1. Accept the new tax law and try to make the best of it. Think again. This will not
happen as the politicians in Sacramento cannot fathom that their policies have
led to this problem, and so there can be no acceptance.
2. File suit. Unfortunately, at this point I think that they do not know whom to sue. Think again! I predict that it is only a matter of time before there is a suit filed which will then be reviewed in the ninth circuit.
3. Try to figure out some way to skirt the new law.
The first reflex response was on 1/4/18. Kevin de Leon, leader of the California State Senate had a “brilliant” idea. Instead of writing a check to the Franchise Tax Board (the collector of the state taxes), tax payers could make the check out to “California Excellence Fund.” This would then be considered as a deductible contribution, which would give California tax payers a dollar for dollar state tax credit  . . . and this would then be deductible on the federal return, because it was a contribution and not a state tax! This lame-brained scheme is so out in left field that I would think that the person who thought this up would be embarrassed to attach his name to it . . . but think again, as this is California.
4. Revenge! “Make somebody pay!”
The most recent option, a proposed Constitutional Amendment, is #4 – to convince the voters that businesses have to pay. This scheme proposed by Kevin McCarthy (D, Sac) and Phil Ting (D, S.F.) involves a “tax surcharge” on California companies that make more than one million so that half of the federal tax cut would then go to programs that benefit low income and middle class families. Of course, a logically thinking person would quickly realize that in the long run this would just drive more businesses out of the state, and half of nothing always comes out to nothing. But think again, as this is California.
5. Reduce state expenditures so that state taxes can be reduced. Although this would seem like a logical course of action, think again for this is not in the thought processes of any Democratic politician in Sacramento.
As we are still January, there will be more of #1- #4, but don’t hold your breath for #5!

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