Although Trump and the GOP pretend that their sweeping tax bill will benefit the average person, only America’s wealthiest 1 percent and major corporations stand to gain from the major tax breaks really. And as economists proved years ago, trickle-down tactics do not work. When the rich get breaks, they do not spread the money down to the people below them. They simply keep more for themselves. To combat Trump’s tax scam, four “blue states” have devised an incredible way to ease the tax burden on their citizens.
Because the Trump tax bill capped SALT or State and Local Tax deductions to a measly $10,000 per tax filer, the average person is getting hit hard with this change. This will effect high tax states that tend to provide their citizens with generous benefits, and who also tend to vote Democrat.
The GOP knew what they were doing when they made this change and used it as a technique to undermine the success that blue states have seen in recent years.
But four major blue states have already outsmarted the Republicans in a matter of weeks since the tax bill was passed.
California, New York, New Jersey and Maryland are going to allow citizens to make tax-deductible charitable contributions to the state that count toward their tax payments. This brilliant move shifts the tax burden away from average citizens back to the behemoth companies that have benefited greatly from the tax cuts.
CNBC reported what the Democratic leader of the California State Senate, Kevin de Leon said:
“We’re attempting to come up with ways to negate and blunt the harsh and unfair Republican tax policy.”
CNBC continued, “Some of the ideas include granting a charitable deduction, which remains uncapped after filers pay property taxes. Another idea does away with income taxes and applies a statewide payroll tax to be paid for by employers, which is deductible to them.”
This creative move will nullify much of the GOP’s scheme to defraud the American people of their hard-earned money.
Joseph Bankman, a professor of law and business at Stanford Law School, told CNBC, “The whole intent is to ensure that you get the benefit of the deduction you would otherwise lose.”
In New York, the average citizen had more than $22,000 in SALT deductions. Similarly, in New Jersey and California, the average was $18,000. Marylanders deduct $13,000 on average. The Republicans have stripped away nearly 50 percent of the deductions ordinary citizens can claim.
California is spearheading the innovation. Their state-run charity called the California Excellence Fund is a great alternative to help people get the deductions they deserve. But it does require residents to donate by the end of December instead of by the April tax deadline. New Jersey is following California’s lead.
Maryland is also hitting back at the GOP-favored Estate Tax by lowering the threshold back to $5 million.
New York is planning to combine all these methods to give their citizens the greatest benefits.
The GOP tax plans will add at least $1.5 trillion to America’s long-term deficit, economically crippling forthcoming generations.