[Congressional Record (Bound Edition), Volume 151 (2005), Part 18]
[Senate]
[Pages 24619-24620]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         SUBMITTED RESOLUTIONS

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   SENATE RESOLUTION 294--EXPRESSING THE SENSE OF THE SENATE ON THE 
 RETENTION OF THE FEDERAL TAX DEDUCTION FOR STATE AND LOCAL TAXES PAID

  Mr. SCHUMER (for himself, Mr. Lautenberg, Mr. Durbin, Mrs. Clinton, 
Mr. Corzine, Mr. Salazar, Mr. Kennedy, Mr. Lieberman, Mrs. Feinstein, 
Mr. Dodd, Mr. Kerry, Mr. Obama, Mrs. Boxer, Mr. Feingold, Mr. Kohl, and 
Ms. Stabenow) submitted the following resolution; which was referred to 
the Committee on Finance:

                              S. Res. 294

       Whereas no American should be unnecessarily or excessively 
     burdened with additional taxes;
       Whereas the Federal income tax has grown more complicated 
     and unmanageable over time, imposing burdensome 
     administrative and compliance costs on American taxpayers;
       Whereas on January 7, 2005, President George W. Bush 
     created the President's Advisory Panel on Federal Tax Reform 
     (the ``Panel'') via Executive Order 13369;
       Whereas the Panel was tasked with providing several options 
     for Federal tax reform that would simplify Federal tax laws, 
     retain progressivity, and promote long-run economic growth 
     and job creation;
       Whereas in its final report, released publicly on November 
     1, 2005, the Panel recommended the complete repeal of the 
     Federal deduction for State and local taxes, as a central 
     component of both the ``Simplified Income Tax Plan'' and the 
     ``Growth and Investment Tax Plan'';
       Whereas State and local taxes have been deductible from the 
     Federal income tax since the inception of the Federal income 
     tax in 1913;
       Whereas eliminating the deduction for State and local taxes 
     would create a new form of double taxation at a time where 
     efforts are being made to reduce other forms of double 
     taxation, since repeal would require millions of taxpayers to 
     pay Federal taxes on income that is also taxed at the State 
     or local level;
       Whereas Congress has recently taken steps to expand, rather 
     than cut back, the State and local tax deduction, by 
     reinstating a deduction for State sales taxes for some 
     taxpayers (previously repealed as part of the Tax Reform Act 
     of 1986), as part of the American Jobs Creation Act of 2004;
       Whereas there is some concern, as noted by the nonpartisan 
     Urban-Brookings Tax Policy Center, that eliminating the 
     deduction could ``lower support for public services and lead 
     to a `race to the bottom' in terms of State and local 
     expenditures as States compete to have the lowest taxes in 
     order to attract higher-income households'';
       Whereas the deduction for State and local taxes is not just 
     a concern for a small minority of taxpayers in the largest 
     States, as 22 States saw more than one-third of their 
     taxpayers take the deduction in 2003, the latest year for 
     which data is available (Maryland, New Jersey, Connecticut, 
     Colorado, Oregon, Minnesota, Massachusetts, Virginia, Utah, 
     California, Georgia, New York, Wisconsin, Arizona, Rhode 
     Island, Michigan, Delaware, North Carolina, Illinois, New 
     Hampshire, Nevada, and Idaho (ranked in order of the 
     percentage of taxpayers affected));
       Whereas in tax year 2003, 43,538,000 taxpayers in the 
     United States took advantage of the Federal deduction for 
     State and local taxes, deducting a total of $315,690,000,000, 
     thereby saving taxpayers in the United States approximately 
     $88,390,000,000 in Federal income taxes, assuming an average 
     marginal rate of 28 percent for taxpayers who itemize; and
       Whereas in tax year 2003, the top 25 States ranked by the 
     number of taxpayers affected represented 77 percent of the 
     taxpayers affected nationally, and took 85 percent of the 
     total deductions for State and local taxes, as detailed 
     below:
       (1) In California, 5,807,000 taxpayers deducted a total of 
     $54,920,000,000, thereby saving California taxpayers 
     approximately $15,380,000,000 in Federal income taxes.
       (2) In New York, 3,228,000 taxpayers deducted a total of 
     $37,600,000,000, thereby saving New York taxpayers 
     approximately $10,530,000,000 in Federal income taxes.
       (3) In Illinois, 1,994,000 taxpayers deducted a total of 
     $13,720,000,000, thereby saving Illinois taxpayers 
     approximately $3,840,000,000 in Federal income taxes.
       (4) In Ohio, 1,809,000 taxpayers deducted a total of 
     $12,720,000,000, thereby saving Ohio taxpayers approximately 
     $3,560,000,000 in Federal income taxes.
       (5) In New Jersey, 1,791,000 taxpayers deducted a total of 
     $18,750,000,000, thereby saving New Jersey taxpayers 
     approximately $5,250,000,000 in Federal income taxes.
       (6) In Pennsylvania, 1,765,000 taxpayers deducted a total 
     of $12,400,000,000, thereby saving Pennsylvania taxpayers 
     approximately $3,470,000,000 billion in Federal income taxes.
       (7) In Michigan, 1,627,000 taxpayers deducted a total of 
     $10,350,000,000, thereby saving Michigan taxpayers 
     approximately $2,900,000,000 in Federal income taxes.
       (8) In Georgia, 1,416,000 taxpayers deducted a total of 
     $8,720,000,000, thereby saving Georgia taxpayers 
     approximately $2,440,000,000 in Federal income taxes.

[[Page 24620]]

       (9) In Virginia, 1,355,000 taxpayers deducted a total of 
     $9,630,000,000, thereby saving Virginia taxpayers 
     approximately $2,700,000,000 in Federal income taxes.
       (10) In North Carolina, 1,304,000 taxpayers deducted a 
     total of $8,720,000,000, thereby saving North Carolina 
     taxpayers approximately $2,440,000,000 in Federal income 
     taxes.
       (11) In Maryland, 1,260,000 taxpayers deducted a total of 
     $10,410,000,000, thereby saving Maryland taxpayers 
     approximately $2,920,000,000 in Federal income taxes.
       (12) In Massachusetts, 1,216,000 taxpayers deducted a total 
     of $10,840,000,000, thereby saving Massachusetts taxpayers 
     approximately $3,040,000,000 in Federal income taxes.
       (13) In Minnesota, 969,000 taxpayers deducted a total of 
     $7,060,000,000, thereby saving Minnesota taxpayers 
     approximately $1,980,000,000 in Federal income taxes.
       (14) In Wisconsin, 961,000 taxpayers deducted a total of 
     $8,000,000,000, thereby saving Wisconsin taxpayers 
     approximately $2,240,000,000 in Federal income taxes.
       (15) In Colorado, 856,000 taxpayers deducted a total of 
     $4,570,000,000, thereby saving Colorado taxpayers 
     approximately $1,280,000,000 in Federal income taxes.
       (16) In Arizona, 841,000 taxpayers deducted a total of 
     $4,110,000,000, thereby saving Arizona taxpayers 
     approximately $1,150,000,000 in Federal income taxes.
       (17) In Indiana, 832,000 taxpayers deducted a total of 
     $4,530,000,000, thereby saving Indiana taxpayers 
     approximately $1,270,000,000 in Federal income taxes.
       (18) In Missouri, 772,000 taxpayers deducted a total of 
     $4,890,000,000, thereby saving Missouri taxpayers 
     approximately $1,370,000,000 in Federal income taxes.
       (19) In Connecticut, 713,000 taxpayers deducted a total of 
     $7,970,000,000, thereby saving Connecticut taxpayers 
     approximately $2,230,000,000 in Federal income taxes.
       (20) In Oregon, 641,000 taxpayers deducted a total of 
     $5,100,000,000, thereby saving Oregon taxpayers approximately 
     $1,430,000,000 in Federal income taxes.
       (21) In South Carolina, 574,000 taxpayers deducted a total 
     of $3,390,000,000, thereby saving South Carolina taxpayers 
     approximately $949,000,000 in Federal income taxes.
       (22) In Alabama, 538,000 taxpayers deducted a total of 
     $2,090,000,000, thereby saving Alabama taxpayers 
     approximately $586,000,000 in Federal income taxes.
       (23) In Kentucky, 515,000 taxpayers deducted a total of 
     $3,300,000,000, thereby saving Kentucky taxpayers 
     approximately $925,000,000 in Federal income taxes.
       (24) In Oklahoma, 434,000 taxpayers deducted a total of 
     $2,320,000,000, thereby saving Oklahoma taxpayers 
     approximately $650,000,000 in Federal income taxes.
       (25) In Iowa, 397,000 taxpayers deducted a total of 
     $2,510,000,000, thereby saving Iowa taxpayers approximately 
     $702,000,000 in Federal income taxes:
       Now, therefore, be it
       Resolved, That it is the sense of the Senate that Congress 
     should not repeal or substantially alter the longstanding 
     Federal tax deduction for State and local taxes.

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