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Politics Federal tax overhaul could lead to changes in some states

17:05  06 january  2018
17:05  06 january  2018 Source:   ap.org

Middle class faces risk of fading GOP tax cuts

  Middle class faces risk of fading GOP tax cuts It's a Christmas gift the middle class might want to give back in a few years.The Republican tax overhaul bestows an initial infusion of cash on nearly every taxpayer next year. The Republican tax overhaul bestows an initial infusion of cash on nearly every taxpayer next year. That extra income is likely to please millions of households, support consumer spending and perhaps give the economy a short-term lift.

The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump Lawmakers and governors in some states are grappling with how to protect their constituents. The federal policy implements a maze of changes .

The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump Lawmakers and governors in some states are grappling with how to protect their constituents. The federal policy implements a maze of changes .

FILE - In this Wednesday, Jan. 3, 2018 file photo, New York Gov. Andrew Cuomo makes reference to his father Mario Cuomo as he delivers his state of the state address at the Empire State Plaza Convention Center in Albany, N.Y. During the speech, Cuomo pledged to sue over the new federal tax plan, which he called “an assault” by the federal government. (AP Photo/Hans Pennink): New York Gov. Andrew Cuomo, shown on Wednesday making his state of the state address in Albany, N.Y., pledged to sue over the new federal tax law.  © The Associated Press New York Gov. Andrew Cuomo, shown on Wednesday making his state of the state address in Albany, N.Y., pledged to sue over the new federal tax law. 

CHERRY HILL, N.J. — In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes. In Connecticut and New York, officials are exploring a switch from income taxes to new ones on payroll. A few governors have even called for tax cuts.

The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump signed into law last month. Lawmakers and governors in some states are grappling with how to protect their constituents.

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The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump Lawmakers and governors in some states are grappling with how to protect their constituents. The federal policy implements a maze of changes .

CHERRY HILL, N.J. (AP) — In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes . In Connecticut and New York, officials are exploring a switch from income taxes to new ones on payroll.

The federal policy implements a maze of changes. It cuts tax rates and nearly doubles the standard income deduction. Yet it also caps or eliminates some popular itemized deductions, and sets the personal exemptions to zero.

For many Americans, the result is expected to be lower federal tax obligations, at least initially. Those facing higher bills are expected to be concentrated in some high-tax states.

With legislators starting their sessions and governors writing state budgets, the response is a political priority. The proposals are bold, though not yet fleshed out.

This week, New York Gov. Andrew Cuomo used his state-of-the-state speech to pledge to sue over the GOP tax plan, which he called "an assault" by the federal government. A lawsuit would add taxes to the growing list of Trump administration policies that Democratic states have challenged in court. Other states have not committed to sue, but some leaders have indicated they'll explore the idea.

US to end policy that let legal pot flourish

  US to end policy that let legal pot flourish Attorney General Jeff Sessions is going after legalized marijuana. Sessions is rescinding a policy that had let legalized marijuana flourish without federal intervention across the country. That's according to two people with direct knowledge of the decision. They were not allowed to publicly discuss it before an announcement expected Thursday and spoke on condition of anonymity. The move will leave it to U.S. attorneys where pot is legal to decide whether to aggressively enforce federal marijuana law. The move likely will add to confusion about whether it's OK to grow, buy or use marijuana in states where it's legal, since long-standing federal law prohibits it.

The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump Lawmakers and governors in some states are grappling with how to protect their constituents. The federal policy implements a maze of changes .

The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump Governors in some other states are worried that their own current tax policies could inflict pain for taxpayers as a result of the federal changes .

"I'm certainly not a constitutional lawyer, but the notion that this is not constitutional is something we want to pursue," said Phil Murphy, New Jersey's Democratic governor-elect.

Officials in California and Connecticut also said this week they were considering legal options.

In high-tax states, officials have been focused on protecting taxpayers from the impact of a new $10,000 cap on deductions for paying state and local taxes. In California, Connecticut, Massachusetts, New Jersey and New York, more than one-third of tax filers claim the state and local tax deduction on federal taxes; the average deduction in each state is over $15,000.

California state Senate President Pro Tem Kevin de Leon, a Los Angeles Democrat who is running for the U.S. Senate, introduced legislation this week that would allow people to make charitable donations to the state instead of paying income taxes. That would allow them to claim a charitable deduction on federal taxes.

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The ideas are bubbling up as state lawmakers begin their 2018 sessions and assess the effects of the Republican tax overhaul that President Donald Trump Lawmakers and governors in some states are grappling with how to protect their constituents. The federal policy implements a maze of changes .

CHERRY HILL, N.J. — In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes . In Connecticut and New York, officials are exploring a switch from income taxes to new ones on payroll.

"Our hard-earned tax dollars should not be subject to double-taxation, especially not to line the pockets of the Trump family, hedge fund managers and private jet owners," de Leon said in a statement.

Another Democrat, New Jersey Gov.-elect Phil Murphy, announced a similar plan on Friday but said local governments also could implement it and apply it to property taxes.

Kim Rueben, a senior fellow at the liberal-leaning Urban-Brookings Tax Policy Center, said it remains to be seen whether the IRS would allow deductions for that kind of contribution if it's rewarded with tax credits. There is some precedent for it, though: She noted that some states give tax credits in return for private-school scholarships and that the IRS allows deductions of those contributions.

In Connecticut, two Democratic legislative leaders want to replace income taxes on individuals with payroll taxes on employers.

Under the new federal tax law, employers' state and local taxes would remain deductible. House Speaker Joe Aresimowicz and House Majority Leader Matthew Ritter sent a letter Wednesday asking a state commission to evaluate the idea. New York's Cuomo said he's looking at a similar change there.

New Pot Policy by Trump Administration Draws Bipartisan Fire

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In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes . In Connecticut and New York, officials are exploring a switch from income taxes to new ones on payroll. A few governors have even called for tax cuts.

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Rueben said that for the approach to work, states would have to figure out what to do with the income of high-earners who receive money from investments rather than jobs — something Cuomo said he could address through a tax on carried interest.

Nicole Keading, an economist at the conservative-leaning Tax Foundation, said that change also could mean that states would replace progressive income tax structures with flat payroll taxes.

"You would be raising taxes on low-income people," she said.

The measure could be tough to pass this year with Cuomo and all members of the New York Legislature up for election. Assembly Minority Leader Brian Kolb, a Republican who is running for governor, said the state should focus instead on cutting taxes and spending.

"The issues really hurting New Yorkers are self-inflicted wounds," he said.

Governors in some other states are worried that their own current tax policies could inflict pain for taxpayers as a result of the federal changes.

More than 40 states have income taxes, and nearly all of them rely to some degree on definitions from the federal tax code.

Economists expect that many states will see their revenue rise because they tie their tax laws to federal provisions such as those on personal exemptions, which lower the bills based on the size of households.

Should pot be legal? Let states decide that question, not the federal government

  Should pot be legal? Let states decide that question, not the federal government Attorney General Jeff Sessions has rescinded an Obama administration policy that blocked U.S. attorneys from prosecuting marijuana cases in states where the drug is legal. He announced Thursday that he is instead leaving it up to federal prosecutors to use their discretion in determining whether to enforce the federal law banning the sale and use of the drug.It’s not clear what the full effect of this new policy will be. But it suggests the Justice Department may be planning to strongly enforce federal drug laws against the budding marijuana industry.

CHERRY HILL, N.J. — Some state governments are considering tax changes in reaction to the federal tax overhaul . In high- tax states , the big concern is that taxpayers will owe the IRS more because of a new limit on how much they can deduct for paying state and local taxes .

CHERRY HILL, N.J. (AP) -- In New Jersey and California, top Democratic officials want to let people make charitable contributions to the state instead of paying certain taxes . Tags : Federal , overhaul , could , lead , changes , some , states .

In Maryland and Michigan, the Republican governors have said they will introduce tax cuts to compensate, after the GOP bill eliminated the personal exemption. "Protecting taxpayers should be a bipartisan issue, so that's my holiday gift to the people of Maryland," Maryland's Larry Hogan, a Republican, said last month.

Hogan, however, has to work with a legislature led by Democrats, and it's unclear how they will want to respond. Senate President Thomas V. Mike Miller, a Democrat, said the GOP tax plan will have "dire effects" for many Maryland residents.

"Our governor needs to be focusing on how he can join with members of the House and Senate to combat the evils of this federal tax bill," he said.

Last month, Idaho's state Senate leader, Republican Brent Hill, said he was concerned that new state revenue would come disproportionately from larger families because of the elimination of the exemption. He said the state could consider keeping a personal exemption or offering a state child tax credit.

Meanwhile in Colorado, Gov. John Hickenlooper, a Democrat, asked the Legislature last week for $300 million in new spending for the current fiscal year and for the fiscal year that begins July 1. He cited in part new revenue expected under the federal law, which he has criticized.

Hickenlooper wants to use the extra money for roads, schools and the state reserve.

Associated Press writers Jim Anderson in Denver; Michael Catalini in Trenton, New Jersey; Jonathan J. Cooper in Sacramento, California; Susan Haigh in Hartford, Connecticut; David Klepper in Albany, New York; and Brian Witte in Annapolis, Maryland, contributed to this article.

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Walmart hikes minimum wage, announces layoffs on same day .
<p>Walmart will raise entry-level wages for U.S. hourly employees to $11 an hour in February as it benefits from last month's major overhaul of the U.S. tax code and competes for low wage workers in a tight labor market.</p>NEW YORK, Jan 11 (Reuters) - Walmart will raise entry-level wages for U.S. hourly employees to $11 an hour in February as it benefits from last month's major overhaul of the U.S. tax code and competes for low wage workers in a tight labor market.

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