Author: Charles

California’s Attorney General Xavier Becerra says the federal government has declared the debt to be taxable

California’s Attorney General Xavier Becerra says the federal government has declared the debt to be taxable

Newsom urges California lawmakers not to tax forgiven federal student loans

New York’s attorney general is not backing away from her support of a ballot measure that would tax California student loans forgiven by the federal government, even as new financial details come to light.

California Attorney General Xavier Becerra (D) on Monday called on his fellow California lawmakers not to allow the state to be used by the federal government to tax student loans. He said his office may continue to partner with lawmakers to pass the ballot measure, which opponents say would hurt the state budget.

In July, California forgave $4.3 billion in student loans to more than 740,000 borrowers. It would take the federal government nine months to forgive the remaining $4.2 billion.

The issue has become politicized since the state’s voters rejected a tax on student loans and the federal government used its taxing authority to make that decision even though the state Legislature passed it.

In October, the state-backed California Student Aid Commission called the ballot measure “unnecessary,” and called the question on the 2020 ballot “unnecessary, unreasonable and bad public policy.”

Now, the details of the issue have come to light, as Becerra explained to Newsom Monday.

“I do think California should be able to move forward,” Becerra said. “This is about the tax authority of the United States government.”

Becerra cited the federal tax code, state revenue estimates and how student loan borrowers are treated under the law.

“Now as it happens, because of a clerical mistake, the federal government has declared the whole California debt to be taxable,” Becerra said.

He added: “This is an unintentional error, but it is nonetheless a mistake that needs to be taken care of. Whether it is a mistake, whether it is a glitch, is not for us to decide when the government is the one that makes mistakes, or for the government to decide that

Leave a Comment