S.Amdt. 2611
What it does: Adds SEC. __. SENSE OF THE SENATE REGARDING THE FEDERAL TAX DEDUCTION FOR STATE AND LOCAL TAXES at the end of title IV
Sen. Charles E. Schumer (D-NY)What it changes
1 change to S. 2020 · shown in the bill's text
Adds SEC. __. SENSE OF THE SENATE REGARDING THE FEDERAL TAX DEDUCTION FOR STATE AND LOCAL TAXES at the end of title IV
Adds a sectionIn S. 2020 · Placed on Calendar Senate
(d) Effective Date.--The amendments made by this section shall apply to amounts paid or accrued during the period beginning after December 31, 2006, and before January 1, 2008, and properly allocable to such period, with respect to mortgage insurance contracts issued after December 31, 2006.
Inserted: SEC. __. SENSE OF THE SENATE REGARDING THE FEDERAL TAX DEDUCTION FOR STATE AND LOCAL TAXES.
Inserted: (a) Findings.--The Senate finds the following:
Inserted: (1) No American should be unnecessarily or excessively burdened with additional taxes.
Inserted: (2) The Federal income tax has grown more complicated and unmanageable over time, imposing burdensome administrative and compliance costs on American taxpayers.
Inserted: (3) On January 7, 2005, President George W. Bush created the President's Advisory Panel on Federal Tax Reform (the "Panel") via Executive Order 13369.
Inserted: (4) 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.
Inserted: (5) 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".
Inserted: (6) State and local taxes have been deductible from the Federal income tax since the inception of the Federal income tax in 1913.
Inserted: (7) 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.
Inserted: (8) 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the State and local tax deduction, by reinstating a deduction for State sales taxes for some taxpayers (previously repealed as part of the Tax Reform Act of 1986), as part of the American Jobs Creation Act of 2004.
Inserted: (9) 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".
Inserted: (10) 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 \1/3\ 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)).
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Inserted: (11) 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.
Inserted: (12) 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 described in the following subparagraphs:
Inserted: (A) In California, 5,807,000 taxpayers deducted a total of $54,920,000,000, saving California taxpayers approximately $15,380,000,000 in Federal income taxes.
Inserted: (B) In New York, 3,228,000 taxpayers deducted a total of $37,600,000,000, saving New York taxpayers approximately $10,530,000,000 in Federal income taxes.
Inserted: (C) In Illinois, 1,994,000 taxpayers deducted a total of $13,720,000,000, saving Illinois taxpayers approximately $3,840,000,000 in Federal income taxes.
Inserted: (D) In Ohio, 1,809,000 taxpayers deducted a total of $12,720,000,000, saving Ohio taxpayers approximately $3,560,000,000 in Federal income taxes.
Inserted: (E) In New Jersey, 1,791,000 taxpayers deducted a total of $18,750,000,000, saving New Jersey taxpayers approximately $5,250,000,000 in Federal income taxes.
Inserted: (F) In Pennsylvania, 1,765,000 taxpayers deducted a total of $12,400,000,000, saving Pennsylvania taxpayers approximately $3,470,000,000 in Federal income taxes.
Inserted: (G) In Michigan, 1,627,000 taxpayers deducted a total of $10,350,000,000, saving Michigan taxpayers approximately $2,900,000,000 in Federal income taxes.
Inserted: (H) In Georgia, 1,416,000 taxpayers deducted a total of $8,720,000,000, saving Georgia taxpayers approximately $2,440,000,000 in Federal income taxes.
Inserted: (I) In Virginia, 1,355,000 taxpayers deducted a total of $9,630,000,000, saving Virginia taxpayers approximately $2,700,000,000 in Federal income taxes.
Inserted: (J) In North Carolina, 1,304,000 taxpayers deducted a total of $8,720,000,000, saving North Carolina taxpayers approximately $2,440,000,000 in Federal income taxes.
Inserted: (K) In Maryland, 1,260,000 taxpayers deducted a total of $10,410,000,000, saving Maryland taxpayers approximately $2,920,000,000 in Federal income taxes.
Inserted: (L) In Massachusetts, 1,216,000 taxpayers deducted a total of $10,840,000,000, saving Massachusetts taxpayers approximately $3,040,000,000 in Federal income taxes.
Inserted: (M) In Minnesota, 969,000 taxpayers deducted a total of $7,060,000,000, saving Minnesota taxpayers approximately $1,980,000,000 in Federal income taxes.
Inserted: (N) In Wisconsin, 961,000 taxpayers deducted a total of $8,000,000,000, saving Wisconsin taxpayers approximately $2,240,000,000 in Federal income taxes.
Inserted: (O) In Colorado, 856,000 taxpayers deducted a total of $4,570,000,000, saving Colorado taxpayers approximately $1,280,000,000 in Federal income taxes.
Inserted: (P) In Arizona, 841,000 taxpayers deducted a total of $4,110,000,000, saving Arizona taxpayers approximately $1,150,000,000 in Federal income taxes.
Inserted: (Q) In Indiana, 832,000 taxpayers deducted a total of $4,530,000,000, saving Indiana taxpayers approximately $1,270,000,000 in Federal income taxes.
Inserted: (R) In Missouri, 772,000 taxpayers deducted a total of $4,890,000,000, saving Missouri taxpayers approximately $1,370,000,000 in Federal income taxes.
Inserted: (S) In Connecticut, 713,000 taxpayers deducted a total of $7,970,000,000, saving Connecticut taxpayers approximately $2,230,000,000 in Federal income taxes.
Inserted: (T) In Oregon, 641,000 taxpayers deducted a total of $5,100,000,000, saving Oregon taxpayers approximately $1,430,000,000 in Federal income taxes.
Inserted: (U) In South Carolina, 574,000 taxpayers deducted a total of $3,390,000,000, saving South Carolina taxpayers approximately $949,000,000 in Federal income taxes.
Inserted: (V) In Alabama, 538,000 taxpayers deducted a total of $2,090,000,000, saving Alabama taxpayers approximately $586,000,000 in Federal income taxes.
Inserted: (W) In Kentucky, 515,000 taxpayers deducted a total of $3,300,000,000, saving Kentucky taxpayers approximately $925,000,000 in Federal income taxes.
Inserted: (X) In Oklahoma, 434,000 taxpayers deducted a total of $2,320,000,000, saving Oklahoma taxpayers approximately $650,000,000 in Federal income taxes.
Inserted: (Y) In Iowa, 397,000 taxpayers deducted a total of $2,510,000,000, saving Iowa taxpayers approximately $702,000,000 in Federal income taxes.
Inserted: (b) Sense of the Senate.--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.
Original wording
At the end of title IV, insert the following:
Read automatically from the Congressional Record. Check the original before relying on it.
As printed
SA 2611. Mr. SCHUMER (for himself, Mr. Lautenberg, Mrs. Feinstein, Mr. Feingold, Mrs. Clinton, Mr. Kerry, Mr. Lieberman, Mr. Salazar, Mrs. Boxer, Ms. Stabenow, Ms. Mikulski, Mr. Kohl, and Mr. Kennedy) submitted an amendment intended to be proposed by him to the bill S. 2020, to provide for reconciliation pursuant to section 202(b) of the concurrent resolution on the budget for fiscal year 2006; which was ordered to lie on the table; as follows:
At the end of title IV, insert the following:
SEC. __. SENSE OF THE SENATE REGARDING THE FEDERAL TAX DEDUCTION FOR STATE AND LOCAL TAXES.
(a) Findings.--The Senate finds the following:
(1) No American should be unnecessarily or excessively burdened with additional taxes.
(2) The Federal income tax has grown more complicated and unmanageable over time, imposing burdensome administrative and compliance costs on American taxpayers.
(3) On January 7, 2005, President George W. Bush created the President's Advisory Panel on Federal Tax Reform (the “Panel”) via Executive Order 13369.
(4) 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.
(5) 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”.
(6) State and local taxes have been deductible from the Federal income tax since the inception of the Federal income tax in 1913.
(7) 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.
(8) 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.
(9) 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”.
(10) 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 \1/3\ 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)).
(11) 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.
(12) 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 described in the following subparagraphs:
(A) In California, 5,807,000 taxpayers deducted a total of $54,920,000,000, saving California taxpayers approximately $15,380,000,000 in Federal income taxes.
(B) In New York, 3,228,000 taxpayers deducted a total of $37,600,000,000, saving New York taxpayers approximately $10,530,000,000 in Federal income taxes.
(C) In Illinois, 1,994,000 taxpayers deducted a total of $13,720,000,000, saving Illinois taxpayers approximately $3,840,000,000 in Federal income taxes.
(D) In Ohio, 1,809,000 taxpayers deducted a total of $12,720,000,000, saving Ohio taxpayers approximately $3,560,000,000 in Federal income taxes.
(E) In New Jersey, 1,791,000 taxpayers deducted a total of $18,750,000,000, saving New Jersey taxpayers approximately $5,250,000,000 in Federal income taxes.
(F) In Pennsylvania, 1,765,000 taxpayers deducted a total of $12,400,000,000, saving Pennsylvania taxpayers approximately $3,470,000,000 in Federal income taxes.
(G) In Michigan, 1,627,000 taxpayers deducted a total of $10,350,000,000, saving Michigan taxpayers approximately $2,900,000,000 in Federal income taxes.
(H) In Georgia, 1,416,000 taxpayers deducted a total of $8,720,000,000, saving Georgia taxpayers approximately $2,440,000,000 in Federal income taxes.
(I) In Virginia, 1,355,000 taxpayers deducted a total of $9,630,000,000, saving Virginia taxpayers approximately $2,700,000,000 in Federal income taxes.
(J) In North Carolina, 1,304,000 taxpayers deducted a total of $8,720,000,000, saving North Carolina taxpayers approximately $2,440,000,000 in Federal income taxes.
(K) In Maryland, 1,260,000 taxpayers deducted a total of $10,410,000,000, saving Maryland taxpayers approximately $2,920,000,000 in Federal income taxes.
(L) In Massachusetts, 1,216,000 taxpayers deducted a total of $10,840,000,000, saving Massachusetts taxpayers approximately $3,040,000,000 in Federal income taxes.
(M) In Minnesota, 969,000 taxpayers deducted a total of $7,060,000,000, saving Minnesota taxpayers approximately $1,980,000,000 in Federal income taxes.
(N) In Wisconsin, 961,000 taxpayers deducted a total of $8,000,000,000, saving Wisconsin taxpayers approximately $2,240,000,000 in Federal income taxes.
(O) In Colorado, 856,000 taxpayers deducted a total of $4,570,000,000, saving Colorado taxpayers approximately $1,280,000,000 in Federal income taxes.
(P) In Arizona, 841,000 taxpayers deducted a total of $4,110,000,000, saving Arizona taxpayers approximately $1,150,000,000 in Federal income taxes.
(Q) In Indiana, 832,000 taxpayers deducted a total of $4,530,000,000, saving Indiana taxpayers approximately $1,270,000,000 in Federal income taxes.
(R) In Missouri, 772,000 taxpayers deducted a total of $4,890,000,000, saving Missouri taxpayers approximately $1,370,000,000 in Federal income taxes.
(S) In Connecticut, 713,000 taxpayers deducted a total of $7,970,000,000, saving Connecticut taxpayers approximately $2,230,000,000 in Federal income taxes.
(T) In Oregon, 641,000 taxpayers deducted a total of $5,100,000,000, saving Oregon taxpayers approximately $1,430,000,000 in Federal income taxes.
(U) In South Carolina, 574,000 taxpayers deducted a total of $3,390,000,000, saving South Carolina taxpayers approximately $949,000,000 in Federal income taxes.
(V) In Alabama, 538,000 taxpayers deducted a total of $2,090,000,000, saving Alabama taxpayers approximately $586,000,000 in Federal income taxes.
(W) In Kentucky, 515,000 taxpayers deducted a total of $3,300,000,000, saving Kentucky taxpayers approximately $925,000,000 in Federal income taxes.
(X) In Oklahoma, 434,000 taxpayers deducted a total of $2,320,000,000, saving Oklahoma taxpayers approximately $650,000,000 in Federal income taxes.
(Y) In Iowa, 397,000 taxpayers deducted a total of $2,510,000,000, saving Iowa taxpayers approximately $702,000,000 in Federal income taxes.
(b) Sense of the Senate.--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.
Legislative Activity
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Senate amendment submitted
November 17, 2005