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Spokane, Washington  Est. May 19, 1883

Opinion

Our View: Deductions in danger

The Spokesman-Review

Fifteen days.

That’s how much time Congress will have to make sure taxpayers in Washington – and seven other states – can continue to deduct state and local sales taxes from their federal returns.

When members of Congress return after Labor Day from their current hiatus, they’ll have 15 working days before they are scheduled to adjourn for the year.

The two-year law that allowed for sales tax deductions for taxpayers in states without an income tax expired last December. If it isn’t renewed, it will cost Washingtonians an estimated $500 million next year, or about $500 for a typical taxpayer.

It took 18 years to regain the deduction after Congress reformed the tax code and eliminated it for states that didn’t have an income tax. The law should not only be revived; it should be made permanent. If it’s a matter of fairness – and it is – then it’s wrong to put a time limit on it.

Unless, of course, you want to use the issue as an annual political football to draw votes from politicians who wouldn’t normally be on your side.

That’s what happened this year, when the deduction was punted from the tax-cut package in May to the recently rejected estate tax/minimum wage extravaganza.

The deduction was originally part of the spring tax package that included a two-year extension of the cuts for capital gains and dividend income, which weren’t set to expire for another two years. Nonetheless, provisions that expire in 2008 were given preference over one that expired in 2005.

U.S. Sen. Kay Bailey Hutchison, whose Texas constituents would benefit, predicted Congress would include the deduction in a tax bill before Memorial Day.

Back in May, Senate Majority Leader Bill Frist, whose Tennessee taxpayers would also benefit, assured states that they would not lose the deduction.

“I fought hard to return fairness to the tax code by restoring the sales tax deduction, and I look forward to securing its extension,” he said.

He’d better hurry, because his gambit to use that issue to lure votes for an estate tax cut failed.

Washington state Sens. Maria Cantwell and Patty Murray didn’t nibble on that or the special tax breaks tossed in for Washington state timber companies.

One reason is that Frist was offering only a two-year deal. Two years is better than none, of course, but if, as Frist says, it’s a matter of fairness, the deduction should be permanent.

That way taxpayers in Washington, Texas, Florida, Tennessee, Alaska, Wyoming, South Dakota and Nevada can deduct their state and local taxes just like the residents of the other 42 states. And politicians can stop using the issue as a piñata.

Fifteen days. That’s how long congressional leadership has to stop the games and get it done.