Tuesday, January 16, 2018
How to turn federal tax reform in California’s favor
With the reduction of the state and local tax deduction by Congress, many Californians are crying foul. Paying taxes on one’s full income first to Uncle Sam, and then again to Sacramento, has been called double taxation by Senate President Pro Tem Kevin de León and other political leaders.
There is a simple solution to this problem. California should allow taxpayers to deduct their full federal tax liability on their state tax return – the state and local tax deduction (SALT) in reverse. I am introducing a bill – the Prosperous Economy and Payer Protection through Equitable Rates Act (or PEPPER) – to do just that.
For California taxpayers, Assembly Bill 1864 will restore the full benefit of the SALT deduction. It will also ensure virtually no one pays higher taxes as a result of the new federal tax law. Indeed, by bringing fairness to the tax code, the Legislature would assure Californians receive a tax cut from the federal law to the same degree as other Americans....