FOR IMMEDIATE RELEASE: January 6, 2009
MEDIA CONTACT: Jeff Sadosky
Sen. Hutchison Files Two Bills to Provide Tax Relief
Bills Would Make State Sales Tax Deduction and Marriage Penalty Relief Permanent
WASHINGTON, DC - U.S. Senator Kay Bailey Hutchison (R-TX), Texas’ senior Senator, today, the first day of the 111th Congress, introduced two bills to provide tax relief for millions of Texas families.
Sen. Hutchison’s legislation, S. 35, would prevent future tax increases on Texas families by allowing for the permanent deduction of state and local sales taxes.
Sen. Hutchison, with U.S. Representative Kevin Brady (R-TX), secured a two year state sales tax deduction in 2004, which has since been extended twice, in 2006 and 2008.
“People should not have to pay taxes on their taxes,” said Sen. Hutchison. “The money that people must give to one level of government should not also be taxed by another level of government. Federal tax law should not treat people differently on the basis of state residence and differing tax collection methods, and it should not provide an incentive for states to establish income taxes over sales taxes. The legislation I am offering today will fix this problem for good by making the state and local sales tax deduction permanent.”
According to the Texas Comptroller, the sales tax deduction saves Texans a projected $1.2 billion a year or an average of $520 per filer claiming the deduction. The Comptroller also estimates that continuing the deduction is associated with 15,700 to 25,700 jobs and over $1.1 billion in gross state product.
Recognizing the inequity in the tax code, Congress has repeatedly reinstated this deduction, which is only in effect through 2009. Sen. Hutchison believes Congress must act to prevent the inequity from returning.
Sen. Hutchison also filed S. 74, the Permanent Marriage Penalty Relief Act of 2009. In recent years, Congress has made important strides to eliminate the marriage penalty by raising the standard deduction and enlarging the 15 percent tax bracket for married joint filers to twice that of single filers. Before these provisions were changed, 42% of married couples paid an average penalty of $1,400. Unfortunately, the current marriage penalty relief will only be in effect through 2010. In 2011, marriage will again be a taxable event and a significant number of married couples will again pay more in taxes unless Congress acts.
“We should encourage marriage, not tax it,” said Sen. Hutchison. “Unless we act, in two years millions of married couples will pay higher taxes. Given the challenges many families face in making ends meet, we must make sure we do not backtrack on this important reform. Marriage is a fundamental institution in our society and should not be discouraged by taxes.”
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