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Floor Speech
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Ms. COLLINS. Madam President, as Tax Day approaches, Americans families have begun calculating their taxes and filling out returns. They face a Tax Code that is frustratingly complex and at times unfair. The bill that I am introducing today would remedy a major discrepancy. The SALT Deduction Fairness Act would ensure that limits on State and local tax deductions, also known as SALT deductions, do not unfairly penalize married filers.
Currently, the amount of State and local taxes that both single and married filers may deduct from their annual income taxes is capped at $10,000. Married people who file their taxes separately are limited to $5,000 each. In other words, people would be better off not getting married at all when it comes to the SALT deduction. My legislation eliminates the marriage penalty by treating married couples fairly by doubling their deduction to $20,000 when they file jointly or $10,000 each for married individuals who file separate returns.
The SALT deduction has been in the Tax Code since 1913 when the income tax was established. It is intended to protect taxpayers from double taxation. When the Senate considered the Tax Cuts and Jobs Act, I worked to keep the SALT deduction in the Federal Tax Code because of the increased tax burden its elimination would have imposed on Mainers. They already pay taxes on their homes and seasonal properties, annual excise taxes on their vehicles, sales taxes, and State income taxes. The Senate adopted my amendment, preserving the deduction for State and local taxes up to $10,000.
Maine has one of the Nation's highest State income tax rates, making this deduction especially important to families in my State. Last year, an analysis by WalletHub found that Maine had the third highest overall tax burden behind only New York and Hawaii. Yet, according to the U.S. Census Bureau, Maine's median household income ranks only 32nd in the Nation and is approximately $5,000 below the U.S. median household income. Many Mainers are also subject to high local property taxes. The SALT deduction helps to offset the burden these taxes place on Maine families, providing critical relief for those who itemize their deductions.
More broadly, our Tax Code must be fair to the more than 60 million married couples living in our Nation. A couple should not face a tax penalty for being married. One way to do that is to not penalize the deductions they can take for State and local taxes. The SALT Deduction Fairness Act remedies this.
I urge my colleagues to support this commonsense bill to fix this marriage penalty. ______
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