The Trump administration is preparing to cancel a large swath of federal funding for California, an effort that could begin as soon as Friday, according to multiple sources.

Agencies are being told to start identifying grants the administration can withhold from California. Sources said the administration is specifically considering a full termination of federal grant funding for the University of California and California State University systems.

Singling out one state for massive cuts would be an unusual move, but Donald Trump has long made Democratic-led California a target.

  • Dozzi92@lemmy.world
    6·
    23 days ago

    I was wondering about this. The new BBB or whatever increases SALT to 40k. I live in Jersey. I would have no problem with NJ just taxing me 40k outright. You just pay 40k to live in NJ. And then I just deduct that 40k from my federal tax burden, bringing it down below 0. What’s stopping states from doing this?

    • Skyrmir@lemmy.worldEnglish
      6·
      23 days ago

      The irs wouldn’t recognize the deduction and you would still owe the entire amount to the federal government.

      • Dozzi92@lemmy.world
        3·
        23 days ago

        I’m curious why you say this, and I’m not trying to be argumentative. I pay 11k for property taxes, and so with this I get to deduct that 11k from my federal taxes. And if you mean to say that the IRS and the Feds would be like hey, you can’t do that, yeah, you’re probably right, and I agree. I’m just curious if you had some other rationale for the suggestion. I am no tax expert.

        • Skyrmir@lemmy.worldEnglish
          11·
          23 days ago

          It would be considered tax evasion. Deductions not authorized by federal statute, have no affect on federal tax laws. Start following your own rules, and they will come knocking on your door. Of course with staffing cuts, it could be years from now when they show up.

          • Dozzi92@lemmy.world
            2·
            23 days ago

            Yeah, I guess I’m still a little confused. You’re allowed to deduct State and Local taxes on your federal return. Now it’s 10k, the BBB raises it to 40k. I’m just saying states should levy a tax to maximize the SALT deduction for everyone, because you’re allowed to do it. But it’s not going to happen, just me being silly.

            • Skyrmir@lemmy.worldEnglish
              2·
              23 days ago

              I was misunderstanding a bit myself. I was thinking you meant by yourself. As a state, California could possibly increase property taxes to maximize everyone’s salt deduction. As more of a long term solution it might even be an idea depending on California constitutional law. More likely though, they would just have to fight the illegal impoundment in the court. While it would likely take months to get done, changing tax law the the affects of that would take years.