By:  Estes, et al.                                              S.C.R. No. 1  

WHEREAS, The Tax Reform Act of 1986 eliminated the deductibility of state and local sales taxes paid by federal income tax return filers while it retained the deductibility of state and local income taxes; and WHEREAS, Although the tax legislation was generally designed to simplify the federal income tax, eliminating the deduction for payment of state and local sales taxes created a fundamental disparity adversely affecting citizens of Texas and eight other states that do not levy a personal income tax; and WHEREAS, While citizens in the 41 other states continue to deduct state and local income taxes, thereby reducing their federal income tax liability, taxpayers in Texas and a few other states have no corresponding tax deduction to ease their burden; the net effect of this imbalance is that Texans and citizens of eight other states pay a higher percentage of federal taxes than the majority of American taxpayers; and WHEREAS, In addition to fostering the inequitable treatment of individual taxpayers, this disparity also has worked against the states whose tax structure has no general individual income tax and relies heavily on sales taxes; and WHEREAS, A report published in March, 2002, by the Comptroller of Public Accounts of the State of Texas estimated that the inability to deduct state and local sales taxes could cost Texans more than $700 million for the 2002 tax year and, if the deductions are not restored, could cost the state more than 16,000 jobs that otherwise would be created with a lower tax burden and an increase in disposable family income; and WHEREAS, According to the report, reinstating the deductibility of state and local sales taxes on federal income tax returns could generate substantial benefits for Texas families and the state's economy; and WHEREAS, A family of four with an income of $60,000 could get an additional federal income tax deduction of $1,015, and a single mother with one child and an income of $35,000 could deduct an additional $641; and WHEREAS, The comptroller of public accounts estimates that the more than $700 million in net tax savings that would stay in Texas could encourage $590 million in new investments within the state and an $874 million increase in the gross state product in 2003; and WHEREAS, As a matter of equity and fairness, Texans and the citizens of other states that finance their budgets without an income tax deserve to benefit from federal income tax deductions comparable to those already enjoyed by the majority of United States taxpayers; federal legislation that reinstates the deductibility of state and local sales taxes is currently before the congress; now, therefore, be it RESOLVED, That the 78th Legislature of the State of Texas hereby respectfully request the Congress of the United States to restore the federal income tax deductibility of state and local sales taxes that existed before 1986; and, be it further RESOLVED, That the Texas secretary of state forward official copies of this resolution to the president of the United States, to the speaker of the house of representatives and the president of the senate of the United States Congress, and to all the members of the Texas delegation to the congress with the request that this resolution be officially entered in the Congressional Record as a memorial to the Congress of the United States of America.