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For Sacramento politicians, charity deductions begin at home

POSTED January 16, 2018 6:54 p.m.

It’s nice that somebody in Sacramento finally thinks we’re paying too much taxes.
State Senator Kevin de Leon wants to reduce the tax burden of Californians making more than $100,000 by allowing them to make a donation to the state instead of paying state income taxes.
It’s de Leon’s answer to the federal tax overhaul that caps deductions for state, local, and property taxes for federal deductions at $10,000. In other words, de Leon wants to create yet another tax loophole instead of reducing the overall tax burden.
There is a wild assumption, of course, that the 6 million taxpayers who itemized last year out of the 18 million Californians who sent money to Washington, D.C. would benefit significantly from converting state income tax to just a charitable deduction.
The average claims for state and local taxes is $18,438 in California, according to the IRS. If someone lives in a $600,000 house a third or $6,000 of that $18,438 is paid in property taxes. This is important to keep in mind because the Californians de Leon & Co are worried about being overburdened aren’t your run-of-the-mill working stiffs.  They have decent incomes.
While I make considerably less than $100,000 I don’t begrudge anyone making over $100,000, unless they are public servants and they are well on the north side of $200,000. 
And to be honest, de Leon is right in that a lot of those people in the lower six figures are taxed proportionately more on the surface than people who make less. But they can also make enough money to claim a host of tax credits that cut taxes owed as opposed to tax deductions that simply reduce taxable income. How many people do you know making $50,000 a year are in a position to buy a $70,000 Tesla to get a $7,500 tax credit?
If de Leon really wants to set Sacramento apart from Washington, D.C., perhaps he’d like to jettison all the hocus pocus and eliminate all deductions and tax credits and adjust tax bracket percentages to make California taxes transparent and relatively fair.
It’s rich to hear politicians in Sacramento bellow such as de Leon did in announcing his proposal that the federal “tax plan gives corporations and hedge-fund managers a trillion-dollar tax and expects California taxpayers to foot the bill.”
So who does de Leon thinks picks up the tab for the big tax credits and “tax incentives” that Sacramento politicians regularly dole out to corporations to locate or expand in California? It’s the very same California taxpayers he’s indignant will take a hit from the federal tax overhaul. It’s kind of like the bully who gets upset because anther bully is picking on their favorite punching bag not because he has had a change of heart but because it’s his punching bag.
It’s OK for de Leon and his cohorts to squeeze California taxpayers but not for the federal government to do so.
The actions of de Leon and others is clear what class of taxpayers they have the most empathy given they make $104,118 a year plus $183 per day when the legislature is in session.
They’re indignant because for a change they are in the category of taxpayers being gored.
If you doubt this just look at how grossly unfair the gas tax bill was handled. It is a users’ tax in the truest sense given the money collected is to address wear and tear to the roads. But instead of switching to a GPS-based system where motorists would be charged on miles driven during a given year, they simply upped the tax and then slapped a surcharge on DMV registration that built in even more unfairness.
The gave zero emission vehicles such as Tesla and Volt that aren’t charged a cent in gas tax a flat $100 DMV charge to pay toward road maintenance. In doing so it clearly isn’t a users’ fee as they provide the electric car owners with a break as the flat fee is lower than what many others who buy a new car at the third of the price of a Tesla and with a lower curb weight that reduces wear and tear on pavement. Given the tax is about road maintenance and not air quality if you drive a 2018 electric car that market research shows most buyers of make more than $100,000 a year, then you get a break from the state from your fair share when compared to someone driving a 1996 Toyota Camry.
The question becomes what taxpayers matter most to de Leon when it comes to the wide open subject of tax fairness?
Any speculation about motives or biases when it comes to taxes would quickly disappear if taxes were straight forward without credits and most deductions with brackets adjusted only for income and household size.
But until then proposals like de Leon’s should be viewed as either political posturing or an effort to favor economic peers.

This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209.249.3519.

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