So as they complain about the feds "taking money" from their residents, the response is to make themselves a "charity". So I guess the way that would work is, if you would have deducted $12K for SALT but can now only deduct $10k, the state will "let you" write them a check for $2K as a charitable contribution? So they get $2k from you, and you can maybe at best save $200 on your fed taxes? That sounds like a stealth state tax increase (albeit voluntary).
More like $480. (24% marginal tax rate bracket)
From what I've heard on how it would work:
1. You owe $20k in SALT. (might as well make them a high roller)
2. You write a $10k check to the new "state" charity.
3. They give you a $10k
state tax
credit, so now you only owe $10k in SALT, while the state has still gotten $20k. $10k of it in 'charity', 'balance the budget' type nonsense.
4. Because charity contributions are 100% deductible, you save $3,200 on your federal taxes.
It's changing the nature of the expense from SALT, limited to $10k, to 'charity', which is only limited to something like 50% of your income.