(National Sentinel)Â Exodus: California Democrats are worried about what they think will turn into a mass exodus of wealthy people from the state thanks in large part to the Republican tax reform legislation President Donald J. Trump signed last month.
As part of the tax reform measure, the law limits the amount of deductions wealthy Californians can take off their federal taxes, including limits on property taxes, which are high in the Golden State.
â€œPeople with higher incomes pay a lot more money, and some of them may be tempted to leave,â€ Gov. Jerry Brown said when he unveiled his 2018-19 budget proposal last week. â€œThis was an assault by the Republicans in Congress against California.â€
Republicans denied that, saying that the reform measure, instead, should force Democrats and their voters to reconsider the effects of higher taxation.
Already California Democrats are looking for ways to circumvent the new federal tax law. SenateÂ President pro tem Kevin de LeÃ³n authored legislation that will allow state residents to take their state property taxes off of their federal taxes by listing them as charitable contributions.
It’s already cleared committees and is headed for a vote on the Senate floor.
The Trump IRS, however, said that won’t pass legal muster.
Notes theÂ Sacramento Bee:
Democratic state lawmakers are worried because California relies so heavily on the income taxes it collects from high earners to fund government services. The stateâ€™s wealthiest 1 percent, for instance, pay 48 percent of its income tax, and the departure of just a few families could lead to a noticeable hit to state general fund revenue.
â€œIt is a genuine concern and thatâ€™s why the legislatures in high-tax states are swinging into action immediately,â€ Katie Pratt, a professor at Loyola Law School in Los Angeles who specializes in taxes, told the paper.
â€œThe new tax law is kind of like icing on the cake for some who were thinking about moving out of the state,â€ said Fiona Ma, a Democrat on the tax-collecting Board of Equalization who is running for state treasurer. â€œIf they donâ€™t have to stay here because of work or family, it doesnâ€™t give them a lot of incentive.â€
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