Action Needed – Federal Tax Reform Threatens Counties
October 26, 2017
The House voted today on a budget proposal that sets in motion the first comprehensive changes to the tax code in 30 years and most troubling, the loss of the SALT (State and Local Tax) deduction. Counties are urged to contact their Congressional representatives and oppose the SALT elimination proposal, which has allowed taxpayers to deduct their state and local taxes from their federal taxes since 1862 and avoid a double-taxation while ensuring local government and state control of the tax system. Losing SALT would create new burdens on California’s counties specifically and their ability to raise adequate revenue to provide services for their communities and on behalf of the state. County-by-county SALT profiles are available here.
California House delegation Democrats sent a letter earlier this week opposing the change, noting the long-standing benefits to both the federal and state and local governments under SALT. California is a targeted, disproportionately impacted “high tax, high cost” states along with New York and New Jersey. The biggest impact for individual taxpayers would be those in the $50,000 to $250,000 income range who own a home, with the biggest percentage of losses for middle-income households.
NACo offers a wealth of background information and CSAC will be providing additional resources specific for California counties to engage on this important issue soon. Please contact Dorothy Johnson, CSAC Legislative Representative, with any questions.