OK, Sen. Frist, do you want to win some hearts and minds, which will come in handy during those early presidential primaries that you’re already eyeing?
Do whatever it takes to extend the federal sales tax deduction during the lame duck session. It’s disappointing that you didn’t shepherd this through before Congress broke to go pander to voters for the Nov. 7 midterm elections, but there’s still (barely) time once they (and you) return afterward.
Of course, when the Congressional Genuises passed the legislation granting tax equity to states such as Tennessee that don’t have income taxes, they only did so for two years. The measure included a sunset that, unless the deduction is extended immediately when Congress returns next month, will render all those shoe boxes full of receipts painstakingly stored in hundreds of thousands of Tennessee homes little more than kindling for the brisk fall weather.
According to the IRS, at least 20 percent of Tennesseans availed themselves of the sales tax deduction relief during its first year in 2004. As more taxpayers have discovered the savings, it’s a safe bet that an even higher percentage would take advantage of it this year. (For the uninitiated, it works like this: Congress has long allowed taxpayers in states with income taxes—and only a few don’t have one—to deduct those taxes from their federal returns. What this equity legislation did was allow taxpayers in Tennessee and other states whose major revenue comes from sales taxes to deduct sales tax payments from their gross income on their federal returns. The point was to create tax fairness across the board, and it can result in substantial savings to families.)
At any rate, in the Senate—and under the leadership of the M.D.—the deduction extension unfortunately has become commingled with raising the minimum rage and cutting the dreaded estate tax. Some of Frist’s colleagues—and we’re with them on this one—would prefer to consider the deduction extension on its own, while some Democrats are balking entirely and claiming the tax break is for the rich. Never mind that they’re laboring under a gross misconception and would be screwing their own constituents to fight the sales tax deduction (and, in the process, the minimum wage increase). They must be from income tax states and therefore willing to get a rhetorical score without alienating their own constituents. Noble, bastards. (Here’s one instance in which a comma makes all the difference.)
Lumped in with the sales tax deduction are also deductions for tuition and one for teachers who spend their own money for classroom materials—neither of which should be considered remotely controversial.
In the end, Frist M.D. will have to do what he has up to now been unwilling to do on this issue: compromise. He’ll have to be willing to separate the extension from these other issues. Otherwise, it simply won’t pass the Senate. Chances are pretty good that, if that happens, many Tennessee voters will remember it come the 2008 presidential election season.