Washington, D.C. - U.S. Representative Kevin Brady (R-TX), a member of the tax writing Ways & Means Committee in the U.S. House of Representatives, introduced legislation, The Sales Tax Equity Act, in Congress today that would treat Texans the same way others in America are treated when it comes to paying federal income tax.

 

Brady's bill, jointly introduced with a bipartisan group of congressional legislators, restores the sales tax deduction Congress repealed in 1986. Specifically, the act would allow taxpayers to deduct either their state and local sales tax or their state income taxes from their federal tax return.

 

"When tax time comes around each April, taxpayers in Texas and seven other states are discriminated against merely because we live in a state that wisely chooses not to burden families with a state income tax," notes Brady.  "Taxpayers in 42 states are allowed to deduct a portion of their state income taxes. But states like ours that rely upon sales taxes are discriminated against. "

 

"Americans should not punished merely because of where they live. States should be free to choose how to fund their government without pressure from Washington.  Uncle Sam's bias toward the income tax is unfair and needs to end."

 

Texas Comptroller Carol Keeton Strayhorn estimates the average Texas family  would save just under $300 a year on their federal taxes.  Supported also by Governor Rick Perry, The Sales Tax Equity Act would provide an economic boost by creating over 16,000 new jobs, $590 million in new investments, and $874 million in increased gross state product in Texas.  

So that families don't need to keep a shoe box of sales receipts, under Brady's bill the Internal Revenue Service would establish average deduction tables based on filing status, number of dependents, adjusted gross income and rates of state, and local general sales taxes.  The tables, which taxpayers could opt for, are indexed for inflation.

 

The bipartisan delegation announcing the legislation at a news conference today in Washington include: Barbara Cubin (R-Wyoming), Brian Baird (D- WA), Zach Wamp (R-TN), Mark Foley (R-FL), Jim Cooper (D-TN) and Marsha Blackburn (R-TN).

The group is pushing to include the measure in President Bush's Jobs & Growth tax relief package, noting that the measure will help stimulate consumer spending, restores fairness and helps low and middle-income taxpayers.

 

"Sales taxes add up for a family over the year," says Brady.  "This is an issue of fairness and of reducing the federal tax burden."

 

"Another merit is this benefits taxpayers in every state because it gives them the option of deducting whichever state tax is higher, sales or income. That is a welcome tax relief option", says Brady.

 

Other members of the Texas delegation supporting The Sales Tax Equity Act include:  Sam Johnson (R) Gene Green (D) Michael Burgess (R); Eddie Bernice Johnson (D); John Carter (R); Max Sandlin (D); Ron Paul (R); Ralph Hall (D); Martin Frost (D); Henry Bonilla (R) and Silvestre Reyes (D).
 
States without a state income tax include: Texas, Florida, Tennessee, South Dakota, Nevada, Washington, Wyoming, and Alaska. The bipartisan Joint Committee on Taxation estimates the measure will provide $29 billion of tax relief over the next decade.}