>> Faced with an uncertain financial future after Washington's radical tax reform, California is exploring the idea of turning local tax payments into charitable donations. California is among the high cost states hit hardest by a GOPs revamp that limits deductions of state and city taxes to $10,000. If that seems like a lot, the problem in the Golden State is that about six million taxpayers deducted an average of more than $18,000 for state and local taxes.
So this week, California state senate leader Kevin DeLeon John introduced legislation that will let residents donate the non-deductible portion of local taxes to a new entity called the Excellence Fund. They would be able to deduct that amount from their federal taxes as a charitable. Charitable contribution, but will it work?
Reuters Correspondent Robin Respaut.>> It's unclear what the White House or the IRS thinks about this proposal. We'll see in the coming weeks and months how much pushback there is. California isn't the only state looking for workarounds. Democratic Governors in New York and Connecticut are also looking for ways to challenge the constitutionality of the cap.
And New York Governor Andrew Cuomo is also looking for ways to revamp that state's income tax system as a way to work around the new reforms.>> An IRS spokesman on Friday declined to comment on the California bill.