Obey warns new tax proposal would double tax Wisconsin taxpayers
WASHINGTON, D.C. - Seventh District Congressman Dave Obey today attacked President Bush's tax advisory commission's recommended tax code change that would eliminate the ability of taxpayers to deduct on their federal tax return the amount of taxes they have already paid to state and local governments.
For Wisconsin taxpayers this scheme would result in double taxation and would have the effect of taking an additional billion dollars out of Wisconsin taxpayers' pockets.
"This scheme is an incredible rip-off by western and southern oil and gas producing states at the expense of northern snowbelt states," said Obey, the senior Democrat on the House Appropriations Committee.
Obey said that only a handful of states would be hit harder than Wisconsin and Minnesota under this proposal. "States like Texas have no state income tax because their budgets are supported by oil and gas revenue which snowbelt taxpayers pay every time we buy natural gas, gasoline or home heating oil. So this proposal clobbers us and doesn't lay a glove on them. States like Wisconsin have no oil, gas or coal to sell so we have to rely on state income and sales taxes. That means that if Wisconsin loses that state tax deduction, Wisconsin taxpayers would be paying taxes on the same money twice, once when they pay their state taxes and again when they lose their federal tax deduction for those state taxes."
This plan that benefits western and southern oil, gas and coal producing states at the expense of northern snowbelt states should come as no surprise Obey said. "This scheme is a recommendation made to a President from Texas and a Vice-President from Wyoming by a commission headed by a former Senator from Louisiana and a former Senator from Florida. All four states stand to benefit from this recommendation at our expense - Louisiana raises most of their revenue from oil and gas, Florida has no state income tax, and both Texas and Wyoming have no state income tax and raise most of their revenue from oil, gas or coal."
"This isn't a new fight," Obey concluded. "We had to fight this same scheme when the Reagan Administration tried to take away Wisconsin's state and local tax deduction. We won that fight and we're going to have to win this one too."
http://obey.house.gov/HoR/WI07/Newsroom/Press+Releases/Obey+warns+new+tax+proposal+would+double+tax+WI+taxpayers.htm