A Democrat friend years ago chided business owners, if he had actually known any, who conducted business in a manner that minimized taxes. He called any such maneuvers tax schemes.
The worm turns.
Talk about tax schemes. Taxing entities in the state of New York now have a scheme to allow the tax payers to avoid the $10,000 cap on state and local tax deductions. The scheme involves new laws that seek to maintain a credit against federal taxes by calling the local tax payments "charitable contributions" when the money goes to certain qualified institution.
Here's WaPo from last April: Gov. Cuomo tries shielding New Yorkers from GOP tax law, in possible model for Democratic-controlled states:
On Saturday, New York became the first state to approve new tax measures designed to shield residents from tax hikes under the GOP bill signed by President Trump.
The two provisions — one creating a new “charitable” fund to replace local property taxes, and the second a largely technical change in how taxes are assessed — aim to help taxpayers avoid a new $10,000 cap on the amount of state and local taxes they can deduct from their federal taxes.
But the IRS is resisting. Note this from WSJ.com: New York Towns Gearing Up to Fight IRS Ruling on Local Taxes, (Alternate link), to wit:
State lawmakers approved a bill in March that allowed the creation of the charitable funds. Under New York’s law—which is similar to legislation adopted in New Jersey and Connecticut—localities can issue a taxpayer a credit against their property taxes for up to 95% of the amount donated to a designated charitable fund. New York may issue credits against state income tax for up to 85% of a donation.
Fourteen New York municipalities have set up the charitable funds, according to a database of local laws and interviews with municipal officials. Charitable deductions against federal income aren’t limited, but the IRS rule would block the relief intended by New York lawmakers by requiring taxpayers to subtract the value of the state credits from the amount of their donation.
Who would have ever thought that Democrats could get conservatives to root for the IRS?
2:45 PM 10/2/2018