MOORLACH UPDATE — Classic Poker Bluffs — March 5, 2018

The Associated Press weighs in on California’s proposed charitable deduction income tax scheme in the first piece below, which appears in TruthDig and the Greensburg Daily News (also see MOORLACH UPDATE — Tomorrow’s Budget Release — January 9, 2018 and MOORLACH UPDATE — Contribution Contrivance — January 6, 2018).

The second piece is a recent photo from Capital Public Radio showing me working away at the end of last year’s Session. I provide it because, on the last night of that Senate Floor Session, after listening to enough Trump bashing by the Democrats, I stood up and stated that it was a shame the Democratic National Committee didn’t come up with a better candidate for President. If the Democrats could have done someone, anyone, better than Hillary Clinton, perhaps the outcome in November of 2016 may have been different. And I could have been spared all their whining and vitriol.

To have to spend last year listening to “tax return, this” and “Russia, that” — ad nauseam — spare me! And, the taxpayers of California had to pay former U.S. Attorney General Eric Holder a retainer, too? When he and Hillary were the biggest hypocrites when it came to the U.S.S.R.? Are you kidding me?

The California Republican Assembly, on whose board I served back in 1991 to 1993, had their convention this past weekend in Buena Park. They asked for an editorial submission for the weekend’s program magazine. The escapade of Democrats moaning and groaning about Russia for its supposed involvement in the November 2016 election, when Eric Holder and Hillary Clinton were waste deep in Russian relations, and a national defense nuclear faux pas, could not be left without some righteous indignation. It is the third piece below.

Democrats in State Offices Are Pushing to Cut Taxes for Wealthy

GEOFF MULVIHILL / The Associated Press

CHERRY HILL, N.J.—Resistance to the Republican tax overhaul comes with an ideological twist for some Democratic state officials: They’ve styled themselves as champions of the working class but are pushing hard for measures that would reduce taxes mostly for the wealthy.

Democratic governors and lawmakers in a handful of high-income, high-tax states are promoting policies that are intended to spare their residents the pain of the new $10,000 cap on deductions for state and local taxes. Connecticut, New Jersey and New York are even planning to sue the federal government over the new cap, which was a key provision of the Republican tax overhaul adopted in December.

The legislative workarounds have moved swiftly through state Senate chambers in California and New Jersey. A bill with similar components passed the Oregon Senate and House in the last two weeks. The concept is under consideration in Connecticut, Maryland, New York, Rhode Island and the District of Columbia.

Proponents say the cap on state and local tax deductions disproportionately affects states controlled by Democrats and raises the cost of living. They say that has the potential to drive well-off residents to other states.

California state Senate President Pro Tem Kevin de Leon, a Democrat sponsoring the bill there, said the state budget would take a big hit if wealthier residents flee California because they pay the bulk of the taxes.

“We have to offer services like schools, like health care, like resources for senior citizens who have Alzheimer’s,” he said.

John Moorlach, a Republican state senator, finds irony in the Democrats’ efforts.

Last year, a Democratic colleague sarcastically thanked him for taking a stance that would protect yacht owners. This year, Moorlach had a retort: “It’s rich that you guys are trying to help the wealthy now in California,” he said at a January committee meeting. “So welcome aboard.”

De Leon, who is running for U.S. Senate, said it’s the first time he’s ever been criticized for helping the wealthy.

Republican critics say the states should be reassessing their taxes instead of trying to circumvent the new tax law.

“What’s worse?” asked New Jersey state Sen. Joe Pennacchio, a Republican who voted against the work-around measure there. “Not being able to take the tax deduction or having high taxes to begin with?”

Under the deductions, known as SALT for state and local taxes, money paid to state and local governments is not counted as taxable income by the federal government in many cases. The higher a taxpayer’s state and local taxes, the bigger the benefit the federal deduction can be.

The new law caps the deduction while also lowering tax rates. Overall, it’s expected to result in reduced tax bills for most Americans, with the biggest savings going to high earners.

But in California, New Jersey and New York, a much larger share of the top 1 percent of earners — 24 to 43 percent of them — actually would see their federal taxes rise under the GOP tax law, according to an analysis from the nonpartisan Tax Policy Center. That is largely because they would lose most of the benefit of the SALT deduction.

New Jersey Gov. Phil Murphy’s office describes the push for a work-around to the new cap on local taxes as a matter of fairness, especially if many of the federal tax breaks expire as scheduled in 2027.

“If you eliminate the cap on tax deductions, rich people who are already getting a tax break would be getting a bigger tax cut,” said Steve Wamhoff, a senior fellow at the progressive Institute on Taxation and Economic Policy.

His organization found that the average federal tax savings from eliminating the cap would be well under $1,000 per tax filer in every state for every income group, except the highest 20 percent of earners. But it would add up to tens of thousands in annual tax savings for the top 1 percent in most states — and more than $100,000 in California.

The New Jersey legislation would let local governments and schools set up charity funds. Taxpayers who donate would receive deductible tax credits toward their property taxes. Under the California bill, the contributions would be to state government entities, and 85 percent of the donations could count against state taxes.

The idea is that counting state and local taxes as charitable donations would allow them to continue being deducted from federal income. Critics say the IRS might not allow it, potentially putting tax filers in those states at risk.

The California Senate on September 12, 2017.

Andrew Nixon / Capital Public Radio

The Democratic California

Legislature’s Eric Holder


By John Moorlach

Looking back on 2017, two noteworthy themes are of interest to reflect upon. The first: What was the alleged impact of Russia on the 2016 presidential election and who was really manipulating whom? The second: What was Eric Holder’s involvement in the whole Russia matter and how does this impact California’s taxpayers?

Holder is the former U.S. attorney general under President Obama who in January 2017 was hired to fight for the California Legislature against President Trump on immigration, the environment and other concerns.

Never mind that the state Senate has unfettered access to the Office of Legislative Counsel and easy access to the state attorney general’s office, or several highly trained lawyers on staff.

The price for Holder’s retainer: $25,000 a month. And, to date, I have no idea what that actually paid for.

Senate President Kevin de León, D-Los Angeles, proudly declared these supposed benefits back in January 2017, “Having the former attorney general of the United States brings us a lot of firepower in order to prepare to safeguard the values of the people of California.”

Which values was he protecting in California? Certainly not the scores of people now claiming rampant abuse of power in our state’s unhallowed granite halls.

While he proclaimed Russia’s influence in Trump’s election, we now find that Holder was not safeguarding America’s values in the controversy over the Obama administration’s involvement in the purchase of Uranium One, a Canadian mining company, by Russia under President Vladimir Putin.

Millions of dollars and political favors were traded for untraced uranium exchanges abroad while former President Bill Clinton and former Secretary of State Hillary Clinton enriched themselves through their shell charity, the Clinton Global Initiative. Holder was bluffing and deflecting!

Congressional Republicans are pursuing an FBI informant with potentially damaging information who had been kept silent because of a gag order. The media are finally getting hip to the idea that the Clinton cabal perpetrated explicit fraudulent dealings, including extortion, bribery and kickbacks. So Holder had no idea this was going on? Right.

And let’s not forget that Holder, while in office, was held in contempt by the House of Representatives for failing to provide documents for an investigation into the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Operation Fast and Furious gun “walking” scandal. This surreptitious government operation allowed illegal guns to flow to Mexico, expecting they would be traced instead to Mexican drug gangs.

When the documents were produced after a court order, Rep. Jason Chaffetz, then the chairman of the House Committee on Oversight and Government Reform, wrote in a summary, “[T]he documents reveal how senior Justice Department officials – including Attorney General Eric Holder – intensely followed and managed an effort to carefully limit and obstruct the information produced to Congress.”

This was known a year ago when Democrats in the California Legislature hired Holder!

But that wasn’t the point. Rather, the Democrats and Holder made a classic poker bluff on the involvement of Russia in our nation’s politics. The Democrats boldly claimed President Trump benefited from Russian involvement in the 2016 election. When, in fact, Hillary Clinton was deeply involved with Russian money interests over a critical nuclear-bomb ingredient. Reprehensible! A charade! Perhaps treason.

What else was Holder covering up for while he reaped his retainer? Was he aware of the sexual harassment scandals from top Democratic donor Harvey Weinstein and his ilk in Hollywood – an industry we Californians subsidize with some $300 million in tax credits?

Or similar scandals in California’s Capitol Building allegedly involving legislators, senior staff and powerful lobbyists, which now are now coming to light? What values are we talking about?

In his high-stakes poker game, Holder’s bluff has been exposed and it now doesn’t look like the Democrats are going to keep the winnings. There are too many willing to come forward and call the bluff. The perpetrators are being revealed, as their cards are turning over.

And one person that could have helped, that should have helped, but was instead a part of the obfuscation, was Eric Holder.

What a sham. What lousy values.

And Californians paid for this bad deal.

John Moorlach, R-Costa Mesa, represents the 37th District in the California Senate

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