DEMS/TAXES/TRUMP AS PRESIDENT: “The new tax law’s limit on the state and local tax deduction may pose a fiscal threat to high-tax states and their affluent taxpayers. But it’s also a political gift to Democratic officials in those states seeking to raise their national profiles by challenging President Donald Trump and circumventing the law.
For Democratic leaders in New York, California and New Jersey, finding state-level workarounds to the new tax code could deliver on a pocketbook issue for a key constituency: voters in high-cost suburbs from Orange County, California, to Westchester, New York, who are set to lose the most from the SALT cap.
Take New York Gov. Andrew Cuomo: He’s called the SALT cap tantamount to ‘economic civil war’ as he lays the groundwork for a potential Democratic primary bid in 2020. Like his counterparts in California and New Jersey, he’s considering mechanisms for taxpayers to fund state and local government with charitable contributions that are then credited against their tax liability; he’s also looking at a proposal to shift the tax burden from income taxes to payroll taxes…
The potential workarounds in each state could face challenges from the IRS or congressional Republicans banking on the revenue the SALT cap was designed to raise.”
-Jimmy Vielkind, Ryan Hutchins, and David Siders, “Blue states eye ‘political gift’ in tax workaround fight with Trump,” Politico, Jan. 9, 2018 05:02am