Kay Bailey Hutchison: “we have a huge inequity in the Tax Code today. There are seven States that have a sales tax but no income tax. The…”

“we have a huge inequity in the Tax Code today. There are seven States that have a sales tax but no income tax. The States that don't have an income tax generally have a higher sales tax. That is the case with my State of Texas and six other States. Fifty-five million taxpayers who have only sales taxes for their State and a local major tax revenue base do not get to deduct from their Federal income taxes what they pay in local and State sales taxes. On the other hand, income tax State taxpayers do get that deduction. So if you have a high sales tax and that is the basis of your revenue for your State and local government, you are paying taxes on your taxes. This is not equitable. Fifty-five million taxpayers have this inequity. My amendment would treat everyone the same. It would give you the opportunity to either deduct sales taxes or income taxes on your Federal income tax return. This discrepancy has a huge impact on my State of Texas. According to the Texas Comptroller, if taxpayers could deduct their sales taxes, more than $700 million would be kept in Texans' pocketbooks. This could lead to 16,000 new jobs and add $900 million in economic activity. Many States are facing financial crises. Our State certainly is, and many other States are. What we want is not an advantage. What we want is equity.”