Property Taxes Have Skyrocketed While Median Household Income Has Decreased
Washington, DC, November 9, 2007 – Senator Hillary Rodham Clinton joined several of her colleagues in urging Senate leadership to consider a measure that would provide a new standard deduction on property taxes for the nation’s middle class homeowners who are struggling to keep pace with escalating property tax rates. In a letter, the lawmakers citied the tax package passed by the House Ways and Means Committee which includes property tax relief for millions of middle class Americans, and urged the Chairman and Ranking Member of the Senate Finance Committee to include a similar homeowner tax relief deduction in the Committee’s tax extender package that is now under consideration.
“New York’s taxpayers are working harder than ever to make ends meet. While property tax rates have skyrocketed over the last six years, the median household income has actually decreased, adding to a financial burden that has threatened homeownership in communities throughout the State and country,” said Senator Clinton. “Enacting property tax relief this year will help balance the field for those taxpayers who do not itemize their deductions, and will provide critical financial assistance to the hardworking middle class.”
U.S. taxpayers are working harder than ever to meet their financial obligations, and rising property tax rates have only increased the burden. Census data shows that from 2000 to 2006, the total amount of state and local property taxes increased by 50 percent, while inflation increased by only 17 percent. Over that same period of time, median household income dropped by 2 percent.
Taxpayers who do not itemize their deductions may claim the standard federal tax deduction, but this deduction does not adequately take into account the rising property tax values and increases. In 2005 roughly 1.4 million New York tax filers who paid property taxes did not itemize their deductions to account for property taxes. A new standard deduction for property taxes would treat itemizers and non-itemizers more equitably, and would provide relief to the more than 32 million homeowners nationwide who do not itemize their deductions.
The full text of the letter follows –
November 7th, 2007
The Honorable Max Baucus The Honorable Charles Grassley
Chairman Ranking Member
Senate Committee on Finance Senate Committee on Finance
219 Dirksen Senate Office Building 219 Dirksen Senate Office Building
Washington, DC 20510 Washington, DC 20510
Dear Chairman Baucus and Ranking Member Grassley:
As you are aware, last week the House Ways and Means Committee passed a tax package that included property tax relief for millions of middle class homeowners. The legislation, HR. 3996, would create a new, standard deduction for real property taxes for homeowners who do not currently itemize their deductions. We support this proposal and feel strongly that Congress should enact property tax relief this year.
Middle class taxpayers are working harder than ever to meet their financial commitments and sky-rocketing property taxes have not made that any easier. While taxpayers who do not itemize their deductions may claim the standard federal tax deduction, this deduction does not adequately take into account rising property tax values and increases. Based on Census data, the total amount of state and local property taxes paid in the United States increased by 50 percent from 2000 to 2006. Over the same period of time, inflation increased by only 17 percent. Over that time, median household income actually dropped by 2 percent.
A new, standard deduction for property taxes would provide relief to the more than 32 million homeowners who do not itemize their deductions. With homeownership threatened in many communities around the country, middle class families should not be penalized simply because they do not itemize. By treating itemizers and non-itemizers more equitably, we will restore a measure of fairness to the tax code and provide needed relief to the middle class.
While we recognize that property taxes are primarily a state and local issue, this does not mean that Congress should not do what it can help ease the burden for taxpayers. We are encouraged that Chairman Baucus and others have advocated for the creation of such a deduction in the past and request that homeowner tax relief be included in the Finance Committee’s tax extenders package now under consideration.
