Resistance State: California in the Age of Trump
Between Sacramento and Washington D.C. sits the rest of the country, and a chasm. On immigration and taxes, guns and healthcare, cannabis and climate change, California is the federal government’s equal and opposite reaction. One year into President Trump’s first term, the push and pull continues—playing out under the Capitol dome, in the courts and on Twitter.
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California taxpayers could see as much as a 22-percent increase in personal income taxes.
Eliminating the state and local tax deduction forces Californians to pay taxes on taxes they have already paid.
And capping property-tax deductions effectively raises the property tax for California homeowners, while reducing the mortgage deduction will make it harder for middle-class families to buy homes.
These are among a bevy of concerns Democrats are taking to their congressional delegates, saying the Republican tax plan would hurt the middle class in California—a state with high property values and scarce housing stock.
State Assembly Speaker Anthony Rendon of Paramount announced Thursday that he and 53 other Assembly Democrats signed a letter urging representatives to take their time on tax legislation rather than aim to pass a measure by the end of the year.
“There should be no rush,” they wrote. “Better to give Californians legislation they can be thankful for than to rush to pass legislation by Thanksgiving.”
Assembly Republicans were invited to sign the letter, which was addressed to House Majority Leader Kevin McCarthy and Minority Leader Nancy Pelosi. None did.
Senate Democrats also chimed in, asking Congress not to exacerbate California’s housing crisis. In a letter being prepared for McCarthy and Pelosi, President Pro Tem Kevin de Leon of Los Angeles led his caucus in seeking to preserve a 4-percent low-income housing tax credit and a tax exemption for the private activity bond program, which they say are critical to the affordable housing package California passed this year.
“We approved this robust bipartisan package because we recognized that the housing shortage is hamstringing our state’s economy and threatening our long-term prosperity. Our investments in housing are estimated to generate more than 70,000 units and over 190,000 jobs in the next five years,” Senate Democrats wrote.
The fretting doesn’t stop there.
Following Gov. Jerry Brown’s plea for GOP delegates not to support the tax proposal, his finance director, Michael Cohen, outlined Thursday many other ways the GOP measure would harm middle-class Californians.
Specifically, he wrote that the plan takes away a deduction for personal loss, which would harm thousands of victims of last month’s Northern California wildfires. And it would make college less affordable by eliminating the deduction for student loan debt and and imposing a new tax on tuition waivers.
As the state’s chief fiscal advisor, he questioned taking on a $1.7 trillion deficit over the next 10 years in order to stimulate the economy when unemployment is low and corporate earnings are at all-time highs.
“Deficit-financed tax cuts are not likely to lead to significant growth because the negative economic effects of the debt would crowd out investment,” Cohen wrote.
A day after Gov. Jerry Brown agreed to the Trump administration’s request to beef up the National Guard in states along the Mexico border, fellow Democrat Lt. Gov. Gavin Newsom said he would not have made the same decision as governor.
But Newsom, who is the front-runner in the race to replace Brown as governor, put a large asterisk on his disagreement with Brown:
Brown announced Wednesday that he would accept federal funding to add 400 California National Guard members “to combat transnational crime.” But he laid out a long list of conditions in an agreement with federal authorities: The troops will not build a border wall or enforce immigration laws, and the arrangement is approved only until Sept. 30. Brown also specified that when it comes to the state’s National Guard, he is the “commander in chief.”
America’s Commander in Chief responded Thursday on Twitter: “Thank you Jerry, good move for the safety of our Country!”