Blue States are working hard to overcome many of the hits they took following the all-Republican Tax Law – a law that decidedly disadvantage Blue high-tax states like New York, New Jersey, Connecticut, Illinois and California. Specifically, under the new tax law, state and local tax deductions were capped at $10,000, leaving everything above that figure subject for the first time to non-deductibility.
Worried about residents moving to lower tax states, Blue States are getting seriously creative about addressing these new burdens on their taxpayers. Specifically, they are quickly moving to identify and weigh a range of creative and legal strategies to lift the new tax burden unfairly levied on many of their most wealthy citizens. In this regard, they are looking seriously at a particularly creative strategy that would allow state and local taxes to be paid under the new tax law up to the new maximum limit of $10,000 per tax payer, and at the same time converting the remainder of taxpayer liability for state and local taxes into a tax-free “contribution” to the State. Such a strategy would effectively make the entire state tax obligation fully tax deductible, just as it had been prior to the new law. This is a highly imaginative solution and one being explored with great energy at this time.
The urgency and incentive behind the work of Blue States is not only to address unfair attacks on their taxpayers in the new all-Republican Tax Law. These states are also very concerned about losing essential funding for schools, mass transit, social programs and other services long embedded in the fabric of their infrastructure and social systems.
It is likely that the pressures they are facing in the near term will result in imaginative, even if short term, fixes addressing the new Law. As obvious will be efforts by all Blue States to win back majorities in Congress, and to seek to turn back this unfair all-Republican Tax Law there.
Add your Comment
or use your BestCashCow account