Tax Fairness A Priority in This Congress (Sen. Evan Bayh)
One of the many problems with the federal tax code is that it can favor taxpayers who itemize their deductions over those who don’t. Under current law, homeowners who don’t itemize cannot deduct their property tax bill from their federal income taxes. Right now, a family must have nearly $11,000 worth of deductions to make it financially worthwhile to itemize their tax forms.
All told, more than 32 million homeowners are paying property taxes to their local and state government and then are being re-taxed on this amount since they can’t deduct the full amount of their property tax bill.
Earlier this fall, I introduced the Homeowner Tax Fairness Act to provide a new, standard deduction to taxpayers who do not itemize their returns. Property tax relief modeled after my legislation passed the House of Representatives on Friday, and 15 of my colleagues in the Senate have joined me in asking the Senate Finance Committee to adopt a companion measure.
With property taxes rising and homeownership threatened in many communities around the country, middle class families should not be penalized simply because they choose to fill out an IRS short form.