2011-02-03 / General Stories

Texas Senator Hutchison Introduces Bill to Reduce Americans’ Tax Burden

At the outset of the 112th Congress, U.S. Senator Kay Bailey Hutchison (R-TX), Texas’ senior Senator, introduced two bills to lower the tax burden for millions of American families.

Sen. Hutchison’s legislation, S. 80, would prevent future tax increases on Texas families by allowing for the permanent deduction of state and local sales taxes.

“The sales tax deduction is important for a very simple reason: people should not have to pay taxes on their taxes. Texas families are targeted by this tax code inequity, and as a result, they have to give the government more of their hard-earned income. My legislation will fix this problem for good by making the state and local sales tax deduction permanent, and finally ending this tax discrimination,” said Sen. Hutchison.

When the deduction for state and local sales taxes was eliminated in 1986, it unfairly penalized citizens in states, including Texas, where there is no income tax. Texans still pay state taxes; revenues are simply collected differently. Recognizing the inequity in the tax code, Congress has repeatedly reinstated this deduction, which is only in effect through 2011. 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 in 2006, 2008, and again in 2010.

According to the Texas Comptroller, the sales tax deduction presently 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.

Sen. Hutchison also filed S.11, to provide permanent relief from the marriage penalty for all Americans. Since 1997, Sen. Hutchison has led efforts to permanently repeal the marriage penalty tax.

“The marriage penalty is the most egregious, anti-family provision in the tax code. One of my highest priorities in the United States Senate has been to relieve American taxpayers of this punitive burden,” said Sen. Hutchison. “I am pleased that relief from the marriage penalty was included in the recent agreement to extend the broader tax relief for all Americans; however the marriage penalty provisions will only be in effect through 2012. In 2013, marriage will again be a taxable institution and a significant number of married couples will be saddled with more taxes. Given the challenges many families face in this economy, we must make sure we do not backtrack on this important reform.”

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 percent of married couples paid an average penalty of $1,400. Unfortunately, the current marriage penalty relief will only be in effect through 2012. In 2013, marriage will again be a taxable event and a significant number of married couples will again pay more in taxes unless Congress acts.

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