November 16, 2007 – Nebraska’s Senator Ben Nelson yesterday cosponsored legislation with Senator Evan Bayh of Indiana to expand property tax deductions for millions of Americans. The legislation would create a new, standard deduction for real property taxes for homeowners who do not currently itemize their deductions.
“The total number of Nebraska taxpayers who took property tax deductions in 2005 was less than half of the owner-occupied homes in Nebraska,” said Senator Nelson. “People should not be penalized just because they don’t itemize. I will be pushing for passage of this legislation, either by itself or attached to legislation to protect middle class Americans from the Alternative Minimum Tax (AMT).”
The bill aims to strike a more equitable balance between itemizers and non-itemizers. Middle-class homeowners today are feeling greater pressure due to rising property taxes, signaling a need for homeowner tax relief. This legislation will extend the property tax deduction to nearly 250,000 Nebraska homeowners by making the deduction standard, eliminating the need for itemization.
“Middle class homeowners are working harder than ever to meet their financial commitments, and in many places across the country property tax increases have not made that any easier,” Senator Bayh said. “Right now, homeowners who don’t itemize their federal returns are effectively being asked to pay taxes on their taxes. They are paying their local property taxes and then the IRS is taxing them again by preventing them from claiming a deduction on this expense. It’s time we put a stop to this double taxation.”
Yesterday’s action was only the latest step taken by Nelson to make it easier for Nebraskans to deduct property taxes. Last week, he joined Senator Bayh in sending a letter to Chairman of the Senate Committee on Finance, Senator Max Baucus of Montana and Senator Charles Grassley of Iowa, Ranking Member of the Committee, asking that this standard deduction be included in the tax extenders package currently under consideration.
Less than one third of all Nebraskans itemize their deductions on tax forms. Only 12% of Nebraska filers with adjusted gross incomes under $50,000 claim the real estate tax deduction, while fewer than half the taxpayers in the $50,000-$70,000 range do so.
A phone-quality radio actuality of Senator Nelson’s remarks is now available.
You can access the recording by dialing 1-800-511-0763; enter recording 1261.
The recording can also be found online at: http://bennelson.senate.gov/media/propertytax111507.mp3
