The SALT Fight Is Coming To a Head

In April, this column reported on the great SALT controversy and how it impacts California taxpayers. SALT stands for “state and local taxes,” and for many years prior to President Trump’s term in office, taxpayers could deduct those taxes from their federal tax returns without limitation. But in 2017, Congress enacted Trump’s tax reform, which limited the amount of state and local taxes that taxpayers could deduct up to $10,000. Whether limiting the SALT deduction is good or bad tax policy is not nearly as interesting as the politics behind it.

The adoption of the limitation by the Republican-led Congress was broadly perceived as a big middle finger to high-tax states such as California. Whether a pretext or not, states with modest income tax rates, or no income tax at all, complained that their residents were essentially subsidizing residents of profligate, big-spending states.

But moderate- to high-income taxpayers in California and other high tax states lost a valuable deduction on their federal returns. Suddenly they felt the full pain of high state income tax rates and property taxes. Frantic state politicians began plans to lessen that pain. For example, immediately after passage of the tax reform law, California floated the idea of a semi-voluntary “charitable deduction” scheme to give high-wealth Californians some relief. It would have created a “charitable” fund within the general fund so high-earning taxpayers could claim a deduction for “donating” the equivalent of what they owed in state taxes. But the IRS, in an opinion letter, quickly shot down that idea.

More successful was a method adopted by many states to provide relief for certain “qualified entities,” consisting mostly of small businesses organized as partnerships, LLCs or S corporations. While Gov. Gavin Newsom signed California’s workaround embodied in Assembly Bill 150, it provided little relief for citizen taxpayers.

Click here to read the full article at the Pasadena Star News

Along With the Now Indicted Steve Bannon, Whom Has The Jan. 6 Select Committee Subpoenaed — and Why?

WASHINGTON (AP) — The House committee investigating the Jan. 6 Capitol insurrection has issued almost three dozen subpoenas as it aggressively seeks information about the origins of the attack and what former President Donald Trump did — or didn’t do — to stop it.

The panel — which referred Trump campaign and White House strategist Steve Bannon’s flouting of a subpoena to the Department of Justice, leading to Friday’s criminal indictment — is exploring several paths simultaneously, demanding testimony from Trump’s inner circle about his actions that day as well as from outside advisers who organized the rally he spoke at the morning of Jan. 6 and allies who strategized about how to overturn President Joe Biden’s victory. They are also turning toward former Vice President Mike Pence’s orbit and questioning witnesses about efforts to pressure him to stop the congressional electoral count.

An attendee’s sign calls for the impeachment of Rep. Liz Cheney of Wyoming as Rep. Matt Gaetz of Florida speaks at a rally in Cheyenne, Wyo., on Jan. 28. Cheney is one of two Republicans on the House select committee investigating the events of Jan. 6. MICHAEL CIAGLO/GETTY IMAGES

The committee is expected to issue more subpoenas as some witnesses, especially those closest to Trump, have indicated they won’t comply or refused to answer questions. But lawmakers on the panel have already talked to more than 150 people, most of them voluntarily, about what led up to the violent siege by Trump’s supporters.

While the committee doesn’t have the power to charge or otherwise punish anyone for their actions, the seven Democrats and two Republicans on the panel say they hope to build the most comprehensive record yet of what happened when hundreds of Trump’s supporters brutally pushed past police and broke into the Capitol, interrupting the certification of Biden’s victory.

A look at whom the committee has subpoenaed, and what is to come in the panel’s investigation:

Trump’s inner circle: The committee’s first subpoenas in late September went to four men who were among his most loyal allies: former White House chief of staff Mark Meadows, Bannon, longtime communications aide Daniel Scavino and Kashyap Patel, a White House national-security aide who had moved to the Pentagon in the weeks after Trump lost the election.

Bannon immediately told the panel he wouldn’t cooperate, citing a letter from Trump’s lawyer claiming that his conversations should be privileged and shielded from the public. The committee balked at that reasoning and the House voted to hold Bannon in contempt, referring the matter to the Justice Department, ultimately resulting in Friday’s two-count indictment against Bannon alleging criminal contempt of Congress.

Meadows could also be held in contempt after his lawyer indicated Thursday that he would not testify, saying in a statement that the courts would have to decide, after the White House notified him that Biden would waive Trump’s claims of executive privilege over the testimony.

From the archives (September 2020): White House chief of staff Mark Meadows lashes out as FBI director fails to echo Trump claims about vote fraud

The House has since subpoenaed several other well-known members of Trump’s circle, including former press secretary Kayleigh McEnany and top aides Stephen Miller and Jason Miller. The committee said all three participated in efforts to spread false information and may have been with Trump as the attack unfolded — a key area of investigation, as little is still known about what he did to try to stop it.

Click here to read the full article at marketwatch.com