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In Our View: Crusade Continues

Make sales tax deduction permanent; action by Congress is long overdue

The Columbian
Published: February 24, 2011, 12:00am

Even though a new and considerably altered Congress was convened last month, it didn’t take long for an old, familiar crusade to resume. It’s the battle to make permanent the policy that allows residents of seven states to deduct sales tax from federal income tax returns. The first bill that Sen. Maria Cantwell, D-Wash., introduced in the 112th Congress calls for such action. Washington is one of those seven states.

This deduction is allowed because residents of other states are allowed to deduct state income taxes from their federal tax returns, abiding by the theory that the income should not be taxed twice. However, Washington and six other states do not have state income taxes, and voters in our state anchored that distinction last fall when they overwhelmingly and correctly rejected a call for a state income tax.

Unfortunately, Cantwell — and U.S. Rep. Brian Baird until he retired last year — have been forced to continually call for extending the deduction. Such redundancy is more than just silly, it’s a waste of time and effort on a perfectly logical deduction; every right-thinking politician in both major parties knows this. It matters in our state, because it means about $500 million a year in total savings on federal income taxes.

Why must this needless charade continue? The Spokesman-Review of Spokane offered a deeply perceptive explanation in a recent editorial: “… members of the other 43 states would lose the ability to take the issue hostage. The ransom note changes from year to year … as the expiration date nears and new demands are announced. In the past, this issue has been tethered to debates over the minimum wage and taxes on dividends, capital gains and estates. (Last) December, it was tied to the extension of the Bush-era tax cuts.”

To her credit, Cantwell was successful last year, just as she was in 2004, when she led the drive to end an 18-year drought during which Washingtonians were unfairly denied the sales tax deduction. But she and others from the affected states have to keep marching back and working for extensions. The unnecessary battle not only causes uncertainty among tax filers, it also causes inconvenience. This year, for example, delayed action by the previous Congress caused Washingtonians to have to wait a month later than usual to start filing their returns.

The Spokesman-Review mentioned one continuing political drama, and here’s another two-pronged drama that’s of interest to political junkies: In this particular issue, Cantwell and others from our state can be said to be tacking strongly to the political right. First, this is a tax “break,” so to speak. It’s certainly viewed that way in states that don’t have it. It’s a good one, and eminently appropriate. Second, the other six states (Alaska, Florida, Nevada, South Dakota, Texas and Wyoming) are generally more conservative than Washington, in some cases much more so. But that only produces a bipartisan effort to permanently extend the deduction.

One would think that, with many members of the new Congress drooling over tax breaks, this crusade could finally achieve its rightful goal. We can only hope.

But in the final analysis, this is not about conservative or liberal policies. It’s about doing what’s right. No credible argument — other than the figurative hostage-taking to which no politician would confess — can be made for keeping the deduction temporary.

It should be made permanent. New Congresswoman Jaime Herrera Beutler, R-Camas, is among the sponsors of a companion bill in the House. She is urged to work hard to generate support among other Republicans, and let this year finally bring about the correct and long-overdue action by Congress.

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