San Diego

Lawmakers Looking to Ease Impact of GOP Tax Plan

Before last year expired, a lot of Californians scrambled to lower their taxes under the new federal overhaul. Now lawmakers here and in other high-tax states are looking at other ways to ease the impact.

Some seem pretty simple, others more complex.

There may be legal challenges.

Accusations have been traded.

Among them, that Republicans "turned the tables" on Democrats, and that Democrats will try to "game" the new system.

"There's going to be all kinds of crazy rules, I'm sure, that folks are going to try to come up with, and people are going to play games,” said Haney Hong, President and CEO of the San Diego County Taxpayers Association. “We know that happens all the time regardless, right? People were going to play games before; people are going to play games afterward."

With state income taxes no longer fully deductible under the new federal law, it's been suggested that they be replaced by payroll taxes on employers, which are deductible.

Also, replacing residents' state income tax payments with tax-deductible charitable donations to their state governments.

There's talk of having states partially or completely replace their income taxes with payroll taxes paid by employers, as with social security and unemployment insurance.

Another idea calls for shifting from taxes on individuals toward federally deductible taxes on corporations.

California taxpayer advocates recommend that states overhaul their own laws.

"We're already taxed very heavily; we're not getting what we want,” Hong said in an interview Wednesday. “Let's simplify the tax code. Let's make it less complicated so taxpayers don't have to be as much of an expert on everything under the sky, be able to pay their taxes effectively and get what we want."

Meantime, with California's new recreational marijuana industry projected to have a $5 billion dollars a year economic impact, the prospect of taxation there is inviting.

Oakland's medicinal marijuana tax generates 5 percent of that city's general fund revenues.

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