California, other states seek to sidestep key provision of GOP tax overhaul
Scattered community efforts to help residents lessen the blow of the Republican tax overhaul’s limit on a popular deduction are turning into full-fledged rebellion in California and elsewhere across the country.
Democratic politicians are pursuing creative — and some say legally suspect — maneuvers to help people circumvent a $10,000 cap on deductions for state and local taxes that took effect Jan. 1.
In addition to considering a lawsuit to try to block the limit, elected officials are looking at ways to turn those state and local tax payments into charitable contributions that would be fully deductible or convert state income taxes into payroll taxes that would have the effect of giving people the benefit of the deduction.
Republicans are already pushing back, raising the potential that Congress or the Internal Revenue Service could move to block the workarounds.