Cantwell Fights to Secure Tax Relief for Working Families, Extend State Sales Tax Deduction
WASHINGTON, DC – Tuesday, as Democratic leaders held a press conference on Republican efforts to raise taxes on middle class families, U.S. Senator Maria Cantwell (D-WA) continued her call for an extension of the sales tax deduction and other tax cuts that help working Washingtonians, teachers, and families saving for college. Cantwell has been working with her Senate colleagues to restore tax fairness for Washingtonians and extend vital tax cuts through stand-alone legislation considered on its own merits. However, Republican leaders continue to block these efforts, insisting that any extensions of these critical tax cuts be tied to controversial, unrelated legislation. The tax cuts championed by Cantwell and her colleagues include the state sales tax deduction, the college tuition deduction, the educator expenses deduction, the R&D credit, the welfare-to-work credit, the new market tax credit, a deduction that would help those who work in the Northwest timber industry, and other important tax credits and deductions.
“There are steps we could take right now to extend these tax breaks and secure relief for working families throughout our state,” said Cantwell. “With three days left in the legislative session, we’re running out of time to deliver much-needed help to families, teachers, and college students across the country. These tax cuts provide tax fairness to our state, help families put their kids through college, and give our economy a substantial boost. I’ll continue working to pass this non-controversial, stand-alone measure this week.”
Legislation offered by Senators Max Baucus (D-MT), Cantwell, and others to extended the state sales tax deduction, the research and development tax credit, a deduction for teachers who use their own money to buy supplies for their classrooms, and a tax deduction for college tuition has been blocked multiple times by Senate Republican leaders in recent weeks. Instead of considering the measures on their own merits, Senate Republican leaders have thus far insisted on tying them to controversial legislation to repeal the estate tax for multi-millionaires and a minimum wage proposal that non-partisan, independent experts said would have cut the salaries of Washington state’s tip workers. The IRS has said it needs tax changes by October 15 for them to go into effect for the 2006 tax year, meaning that time is running out to get these critical deductions and credits signed into law.
In most states, taxpayers can deduct state income taxes from their total income taxed by the federal government. However, from 1986 until 2004, residents of states with a higher sales tax in place of state income taxes went without a deduction for sales taxes. In 2004, Cantwell worked with a bipartisan group of senators and representatives to get this deduction signed into law, and has fought continuously since then to extend the deduction and make it permanent. Without an extension of the state sales tax deduction, Washingtonians will be unable to deduct the sales taxes they pay on their 2006 federal income tax returns.
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