# California proposal to allow its residents to avoid the $10,000 tax deduction limitation **URL:** \ **Category:** Politics & Elections\ **Created:** [January 7, 2018, 1:13am UTC](https://boards.straightdope.com/t/california-proposal-to-allow-its-residents-to-avoid-the-10-000-tax-deduction-limitation/806016 "2018-01-07T01:13:43Z")\ **Posts on this page:** 4\ **Page:** 8
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [August 26, 2018, 3:26pm UTC](https://boards.straightdope.com/t/california-proposal-to-allow-its-residents-to-avoid-the-10-000-tax-deduction-limitation/806016/141 "2018-08-26T15:26:59Z")
The difference between what Georgia is doing and what California is doing is that Georgia’s plan is on shaky ground with respect to the Establishment Clause, while California’s is not. So, again, how is California’s plan worse? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [August 26, 2018, 8:39pm UTC](https://boards.straightdope.com/t/california-proposal-to-allow-its-residents-to-avoid-the-10-000-tax-deduction-limitation/806016/142 "2018-08-26T20:39:23Z")
> [@Chronos](#): > > The difference between what Georgia is doing and what California is doing is that Georgia’s plan is on shaky ground with respect to the Establishment Clause, while California’s is not. > > So, again, how is California’s plan worse? The Establishment Clause argument is separate and outside the scope of the thread. States are free to permit tax deductions for various items. However, under the new law, any state and local taxes above $10k cannot be deducted for federal purposes. Calling a state or local tax a charitable donation, a private school voucher, a solar panel purchase, or anything else but what it really is, a state or local tax, is a sham way to circumvent the new law. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [August 26, 2018, 8:53pm UTC](https://boards.straightdope.com/t/california-proposal-to-allow-its-residents-to-avoid-the-10-000-tax-deduction-limitation/806016/143 "2018-08-26T20:53:29Z")
> [@septimus](#): > > … **Hurricane** , can you help us out here? What _in particular_ allows the Georgian tax credit but not the Californian credit? … I’m not familiar with the Georgia tax credit. Do you believe it will survive as a charitable contribution after this rule goes into effect? ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [September 7, 2018, 7:00am UTC](https://boards.straightdope.com/t/california-proposal-to-allow-its-residents-to-avoid-the-10-000-tax-deduction-limitation/806016/144 "2018-09-07T07:00:26Z")
IRS clarifies that small businesses and pass-through partnerships are not subject to the $10,000 cap. [https://www.accountingtoday.com/news/irs-will-allow-contributions-to-state-and-local-tax-credit-programs-as-deductible-business-expenses-circumventing-salt-deduction-limits](https://www.accountingtoday.com/news/irs-will-allow-contributions-to-state-and-local-tax-credit-programs-as-deductible-business-expenses-circumventing-salt-deduction-limits) ## I imagine tax shelter architects will be intrigued. More from the [LA Times](http://www.latimes.com/business/la-fi-state-local-tax-deduction-20180823-story.html): [INDENT] Some tax law experts also have said that it would be very difficult for the IRS to prohibit efforts designed to circumvent the state and local tax deduction limit without also disallowing the federal tax deduction for contributions to more than 100 existing charitable programs in 33 states. Those programs, many of them in Republican-controlled states, fund state-supported activities such as public schools and college scholarship programs. [/INDENT] So it’s not just Georgia. The paper available at [this link](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3098291) has an interesting table listing some pretty generous charitable tax credits in Alabama, Colorado, Georgia, Illinois, Kansas, Missouri, Oregon, and South Carolina. Less generous ones in other states. This looks like something that will be fought over for years if not overturned before then. [Previous page](https://boards.straightdope.com/t/california-proposal-to-allow-its-residents-to-avoid-the-10-000-tax-deduction-limitation/806016.md?page=7)