National Defense Authorization Act for Fiscal Year 2014

Floor Speech

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Ms. CANTWELL. Mr. President, I wish to thank Leader Reid, Chairman Baucus, Senator Schumer, Senator Stabenow, Senator Wyden, Senator Brown, and Senator Menendez for coming to the floor to talk about this important issue of tax extenders and why we need to get them done now.

In the State of Washington taxpayers are opening the morning newspaper and finding the Seattle Times editorial entitled ``Congress should extend the sales-tax deduction.'' The Seattle Times has been following this issue for years and knows that taxpayers are waiting to find out whether we can continue to deduct our sales tax from our Federal income tax obligation. As Washington is a State that doesn't have an income tax, we want parity with other States and we want to be able to deduct our sales tax as one of those taxes from our Federal tax obligations.

Every year millions of Washingtonians have to wait to find out whether that particular tax provision is going to be extended. I want to make it permanent, and I hope when we do tax reform we will be able to do so. But in the meantime we have to give certainty to the taxpayers in Washington State that as far as these important tax policies are concerned, Congress can act and get things done.

Mr. President, I ask unanimous consent to have printed in the Record that particular Seattle Times editorial.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

[From The Seattle Times, Dec. 18, 2013]
Editorial: Congress Should Extend the Sales-Tax Deduction

Congress needs to end its magical thinking and pass a permanent federal income tax deduction for state and local sales tax.

Year after year, Washington state taxpayers are forced to play Congress' aggravating game of fantasy role-playing. Alas, there are no elixirs or elves, although there are a few ogres.

In this game, Congress pretends it will magically transform into a body capable of passing a comprehensive tax bill. Such a bill would almost assuredly include a permanent federal income-tax deduction for state and local sales taxes, on par with the existing permanent deduction for state income taxes. This matters because some states, such as Washington, have the former, but not the latter.

Instead, every year since 2004, Congress has passed a temporary extension of the sales-tax deduction. Next year, fantastical thinking goes, will be the big fix for the tax code.

Washington's delegation, led for years by U.S. Sen. MARIA CANTWELL, has tried to pop this absurdity. So too this year, with Rep. DOC HASTINGS, R-Pasco, hammering away. President Obama is on board, recommending a permanent sales-tax deduction. But the U.S. House left town on Friday for the year without so much as another temporary extension, effectively ending the deduction beginning in 2014.

This is big money for Washington state. An analysis by the Pew Charitable Trusts released this week shows Washington is the state most dependent on the sales-tax deduction, with 29 percent of filers in the Evergreen State claiming it. The top seven states all have limited or no state income taxes. Filers who claim the deduction typically save about $500 off their tax bill.

The fantasy game will likely resume on Jan. 6: Congress could pass a retroactive exemption, allowing deductions for the full 2014 calendar year. They could even pretend it had never expired, and, with a sprinkle of pixie dust, wipe clean the memory that the 113th U.S. Congress was the least productive in the history of the country, passing just 56 bills as of Friday.

Congress should end this game. Pass a permanent sales-tax deduction.

Ms. CANTWELL. At New Year's, as the ball drops in Times Square, a number of other tax provisions are going to expire, and the lapse of these important tax provisions makes it harder for Americans to invest in clean energy, to hire veterans, to pay for public transportation, and to build low-income housing.

As my colleague Senator Brown was discussing, the Tax Extenders Act of 2013 is about providing predictability and certainty to citizens and to American businesses about tax benefits and investments.

On January 1 the commuter tax benefit will expire. That will mean an increase in household expenses for 2.7 million public transit commuters. In King County, which is the county Seattle is in, more than 1,600 employers use the commuter tax benefit to enable employees to get to and from work.

If you have ever been in the Puget Sound area, you know that transportation and traffic are big issues for us. So, obviously, trying to defer some of that traffic congestion by getting people into commuter transportation is a key part of our strategy. But if we take away the certainty and predictability of tax deductions with regard to commuting, we are going to make our transportation problems worse.

On New Year's Day the tax benefits for those employees who take public transit will be cut nearly in half, from $245 to $130 per month. We need to extend this benefit as a matter of tax fairness.

Transportation is the second largest expense in an American household. American families should be able to choose whether they want to drive or take public transit, and they shouldn't be punished because they are taking a bus or ferry or train.

Across Washington State we have seen firsthand how the other tax extenders help to actually create an environment of certainty and predictability for jobs and job creation. These are bipartisan principles we can all get behind.

Of particular importance to me, as I said, is the State and local sales tax deduction, which affects many people in our State. Individuals living in other States with a State income tax are not faced with these same challenges. Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming are all in the same boat, and I am sure these citizens would want to have the sales tax deduction certainty and predictability. As a result, an average of $640 in deductions is real money back into people's pockets when they itemize those various tax benefits.

We hope this won't continue to be a burden placed on Washington State. We need these tax extenders now.

Additionally, there are other credits, such as the new market tax credit, which is a great program for encouraging investment in challenging areas of our country; the biodiesel tax credit; and the veterans work opportunity tax credit, which is a tax credit to encourage employers to hire veterans. We have had many of these events around Washington State, talking to employers who have successfully used this tax credit. There is also the low-income housing tax credit. I am sure the Presiding Officer probably has projects all over his State that have benefited from the low-income housing tax credit. This is a great incentive to get more affordable housing built in hard-to-serve areas and challenging areas because of high cost. I have already mentioned the commuter tax benefit. All of these are tied to job creation.

Instead of giving predictability and certainty on tax credits, here we are not getting our job done. We should get this done as soon as possible. It is time for Congress to extend these important provisions and to make plans accordingly.

I hope the IRS could be given the predictability and certainty as well in the new year about these provisions so that we are not delaying or affecting the tax season at the end of next year.

The time to act is now, and I hope my colleagues will help us get these measures--which are usually renewed in a bipartisan fashion--done as soon as possible.

I thank the Chair, and I yield the floor.

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