Regarding the Jan. 17 Metro article "Democrats push back on U.S. tax law":
Some states increased taxes largely on the basis of federal deductibility. The federal law would recover some of this money, in part to allow for widespread income tax reduction. Federal income tax rates are now lower, offsetting much of this loss of deductibility. Under consideration in Maryland is the creation of the ability to make an annual charitable contribution on state taxes to support Maryland public schools. This contribution would theoretically be deductible on federal taxes as a gift to charity and would be offset on Maryland's books by giving the taxpayer a 95 percent state tax credit.
Sounds like a shell game to me, and I am confident the Supreme Court would rule it unconstitutional, because state funding for schools is not a charity but an obligation of government. If Maryland received no contributions to the new charity, it would fund the schools anyway through state law.
Proponents are confident that such a change would be a win for everyone involved with no downside. I see many negative impacts: reduced federal ability to provide tax relief and promote growth without worsening the national debt, and the potential for the government to reduce the deductibility of charitable contributions.
Bob Hugman, Woodbridge
