Washington, Nov. 8, 2007 — U.S. Senator Evan Bayh has enlisted the support of 15 Senate colleagues to join his call to provide property tax relief to 32 million homeowners across the country who do not itemize their federal tax returns by allowing them to deduct their state and local property taxes.
The Senators sent a letter yesterday to Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) urging them to include property tax relief for non-itemizers as part of tax legislation currently being considered by the committee. In September, Senator Bayh introduced the Homeowner Tax Fairness Act of 2007, which would allow non-itemizing homeowners to deduct the full amount they pay in property taxes.
“Middle class taxpayers are working harder than ever to meet their financial commitments, and skyrocketing property taxes have not made that any easier,” the letter stated. “While taxpayers who do not itemize their deductions may claim the standard federal tax deduction, this deduction does not adequately take into account rising property tax values and increases.”
The Bayh legislation would provide relief to nearly one million Hoosier homeowners who do not itemize their deductions on their federal tax returns. Across Indiana, Hoosier homeowners saw an average property tax increase of 24 percent this year.
In the letter to the Finance Committee leaders, Bayh and his colleagues note that the total amount of state and local property taxes paid in the United States increased by 50 percent from 2000 to 2006.
Over that same time period, inflation increased by only 17 percent, while median household income dropped 2 percent.
“With homeownership threatened in many communities around the country, middle class families should not be penalized simply because they do not itemize,” the senators wrote. “By treating itemizers and non-itemizers more equitably, we will restore a measure of fairness to the tax code and provide much needed relief to the middle class.”
Last week, the House Committee on Ways and Means approved a property tax relief plan modeled after proposals by Bayh and Congressman Baron Hill (D-IN). The House version approved by the key tax committee would be effective for 2008 and provide up to $700 in new deductions for joint filers and $350 for an individual.
Signatories on the Bayh letter were Senators Mel Martinez (R-FL), Chuck Schumer (D-NY), Bill Nelson (D-FL), Bob Menendez (D-NJ), Russ Feingold (D-WI), Frank Lautenberg (D-NJ), Dick Durbin (D-IL), Ben Nelson (D-NE), Hillary Clinton (D-NY), Jack Reed (D-RI), Herb Kohl (D-WI), Barack Obama (D-IL), Sheldon Whitehouse (D-RI), Sherrod Brown (D-OH) and Debbie Stabenow (D-MI).