Comptroller's Report
Dear Readers:When I spoke to members of the Houston Hispanic Chamber of Commerce in March, I called for a halt to the discriminatory treatment of Texas taxpayers that would mean $701 million a year more in Texans' pockets and would add 16,180 new jobs to our economy.
A study by my agency shows that Texas families and the state's economy will benefit if state and local sales taxes and motor vehicle taxes are deductible on federal income tax returns.
10 Principles for Texas
in the 21st Century
- Develop a better-educated workforce
- Direct more of every education dollar into the classroom
- Raise the bar on student performance
- Cut taxes in Texas
- Introduce competition into Texas government
- Improve government performance and accountability
- Reduce the size of government
- Bring common sense to regulations
- Use technology to cut costs and increase quality
- Return control to communities and individuals
When I spoke to members of the Houston Hispanic Chamber of Commerce in March, I called for a halt to the discriminatory treatment of Texas taxpayers that would mean $701 million a year more in Texans' pockets and would add 16,180 new jobs to our economy.
A study by my agency shows that Texas families and the state's economy will benefit if state and local sales taxes and motor vehicle taxes are deductible on federal income tax returns.
An average Texas family of four who itemizes would see an extra $284 each year in their pockets for their family's priorities. Citizens in Texas and eight other states are denied fair and equitable tax treatment because they have no state income tax.
I have urged the state's Congressional delegation to fight for the restoration of Internal Revenue Service's state and local sales tax and motor vehicle tax deductions for Texas families.
The current system is unfair. It discriminates against Texans and the citizens of other states that have decided against a state income tax. As a result, Texans pay a higher percentage of taxes to the federal government than our neighbors in Oklahoma, who have a state income tax. That's wrong.
An Oklahoman who pays a state income tax can deduct that amount from her or his federal tax return. But the federal government punishes those of us who pay state and local sales taxes rather than state income taxes. If Texas taxpayers could deduct sales taxes and motor vehicle taxes, the playing field would be level.
Allowing Texans to deduct state and local sales taxes and motor vehicle taxes could generate substantial benefits for Texas families. A family of four with an income of $60,000 could potentially get an additional tax deduction of $1,015.
My report indicates that the net tax savings would also generate $590 million in new Texas investment and $874 million in increased Gross State Product in 2003.
The cost to Congress would be less than 1 percent of the federal deductions allowed for state and local income taxes. Now is the time for a fair, level, non-punitive playing field for Texans and for all Americans.
My report, Restoration of the IRS Sales Tax Deduction Should be One of Texas' Main Priorities in Congress, is available online at www.window.state.tx.us.
Sincerely,
Carole Keeton Rylander
Texas Comptroller
