After Jerry Brown Disobeys Trump's Direct Order, Donald Swings The Hammer Hard
Jerry Brown has made many questionable decisions during his time as Governor in California.
His state is often criticized for some of the things they do such as attempting to ban
plastic straws and reducing the criminality of purposely giving someone HIV.
With people like Maxine Waters working in the 43rd district and parts of California
being smeared in feces and needles, it's no wonder the massive west coast state is
the center of yet another controversy.
President Donald Trump and the U.S. Treasury Department are putting the foot down on California.
No more cutting corners or finding loopholes for them!
It appears that California was trying to avoid the new $10,000 limit on state and local tax
deductions.
They were attempting this by claiming taxes are charitable donations.
Not so fast, said the government!
Trump originally promised that the Tax Cuts and Jobs Act would have a tax-reform package
that cut some of the tax burdens for the average family of four who earns $75,000, cutting
the burden of taxes by a reported $2,000.
It also was supposed to increase the household income by about $4,000 through various cuts
on business.
The business corporate tax rate was 35%, but then slashed down to 21%, allowing companies
to invest more income on their product and employees.
Breitbart reported further, stating:
"To fund part of the resulting revenue loss, the Republican-controlled U.S. House of Representatives
limited federal deductions for state and local taxes (SALT) to $10,000 for the first time.
The move hammered high income tax-payers in Democrat-dominated high-tax blue states like
California, Illinois, New York and New Jersey.
According to the Tax Policy Institute, the first-time ever cap on SALT deductions was
expected to generate $36.1 billion more in federal tax collections in 2018.
But the pain to high-income tax-payers in California and the other so-called "deep-blue"
states doubles to $74.5 billion in 2021 and almost triples to $100.4 billion by 2025.
Four days after Trump's tax reform took effect on January 1, then-State Senate leader
Kevin de León (D-Los Angeles) proposed "SB-227 Education finance: Local Schools and Colleges
Voluntary Contribution Fund" to allow any Californian that had more than $10,000 in
state and local tax deductions to make a dollar-for-dollar charitable donation to the "California Excellence
Fund" for a dollar-for-dollar state tax credit to avoid the SALT limits.
De Leon, who is running for U.S. Senate, tried to justify draining federal taxes to the San
Jose Mercury News: "The Republican tax plan gives corporations and hedge-fund managers
a trillion-dollar tax cut and expects California taxpayers to foot the bill," He added, "We
won't allow California residents to be the casualty of this disastrous tax scheme."
Although federal law allows charitable deductions for over-payment of taxes to those each year
that want to donate to help pay down public debt or maintain a park under IRC § 170,
the contributions must be "solely for public purposes."
But Treasury Secretary Steven T. Mnuchin released a statement on August 23 indicating that California's
"charity" was a scheme to avoid paying federal taxes: "Congress limited the deduction
for state and local taxes that predominantly benefited high-income earners to help pay
for major tax cuts for American families."
He added, "The proposed rule will uphold that limitation by preventing attempts to
convert tax payments into charitable contributions."
The new U.S. Treasury-proposed rule, according to The Hill, would only allow taxpayers to
claim the federal charitable deduction under "quid pro quo" guidelines for the amount
of donations that exceeds the amount they received in tax credits.
As an example, if the taxpayer donated $1,000 to the California SB-227 state charity and
received a 50 percent state tax credit, the taxpayer would only be able to claim a federal
charitable deduction of $500, according to the Treasury Secretary.
Mnuchin emphasized that the Treasury Department has projected that 90 percent of U.S. taxpayers
that do not file tax returns with standard deductions will not be impacted by the SALT
limits.
The 5 percent of U.S. taxpayers who file itemized returns with income tax deductions above the
$10,000 will be unable to exploit the charitable deduction to avoid the SALT cap."
If people want to keep talking about the taxes, then let them.
As long as people play by the rules and businesses invest in their employees, then the working
Americans will benefit.
If Trump cuts the tax rates from 35% to 21%, then that's amazing and gives businesses
14% of their income back to their company.
That was money that was taken by the government, proving that taxation is indeed theft.
There's no reason why a large business should ever pay more than a third in taxes.
In fact, no one should.
If you live in a Democrat-controlled city, then what are your taxes like?
Does your mayor tax you like crazy?
Mine does.
Philadelphia's Mayor Kenney seems like he taxes his own taxes sometimes.
We have a sugary drink tax in Philadelphia that has put people nearly out of business,
hurting the small business owners who run corner stores in the city.
We can't complain that taxation is theft and then not be happy with a 35% to 21% tax
break.
Anyone who isn't happy with that might need to rethink their train of thought.
Getting back 14% more of your income means you can spend less time finding loopholes
and more time improving your business.
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