Texans Could Save $700 Million On Federal Income Taxes

Texans are giving the Internal Revenue Service more money than they should, according to Texas Comptroller Carole Keeton Rylander.

Legislation which would restore the IRS sales tax deduction for Texans would be good for the state. The $700 million not sent to the federal government would generate 160,180 new Texas jobs, provide $580 million in new Texas investment and add $874 million to the Gross State Product in 2001.

Texans and citizens in eight other states are denied fair tax treatment because we do not deduct a state income tax from our federal taxes.

“Texas taxpayers don’t want a state income tax but we do deserve a tax deduction that other taxpayers from other states enjoy,” said Peggy Venable, director of the 48,000-member Texas Citizens for a Sound Economy (CSE).

“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,” Comptroller Rylander said. “If Texas taxpayers could deduct sales taxes and motor vehicle taxes, the playing field would be level.

“This is a win-win for Texas taxpayers and Texas government. I urge Congress to quickly adopt legislation that will put hard earned money back in the pockets of hard-working Texas families,” Rylander said.

The Comptroller is championing federal legislation cosponsored by Senators Kay Bailey Hutchison and Phil Gramm (S. 291), and H.R. 322 with 18 Texas Congressmen as cosponsors.

According to the Comptroller, increased economic activity could boost the next biennial budget by $66.5 billion.

Ultimately, CSE supports scrapping the federal income tax code and replacing it with a flat tax.

”The current system is not manageable and unfair to all taxpayers,“ said Venable.

According to CSE:

  • In 2002, the federal tax burden on American families is the greatest since WWII. The average family spends more on taxes than on food, clothing and shelter combined.
  • Every year 300,000 trees are sacrificed to provide the 8 billion pages of paper Americans send the IRS.
  • This year, Americans will spend 5.8 billion hours complying with the convoluted, complicated tax code. That is more hours than is spent building every car, truck and airplane made in the US.
  • The current tax system is not fair. The top one percent of the wage earners pays 36% of the taxes.
  • Americans will pay a record $1,946 trillion in federal taxes. Total taxes are a record 32% of the national income.