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Monday, January 22, 2007

The Fine Print

After winning reelection, one of Sen. Maria Cantwell's first orders of business was to work to extend the sales tax deduction on federal taxes for Washington residents. She made a point of underscoring that this legislation "is critical for our state’s working families". Unfortunately, as with so many other things political, this assertion is only partly true.

Unlike Washington's senior senator Patty Murray -- who was a lot more up front about her support -- Cantwell's choice of wording muddied the real picture.

I'm not suggesting that this deduction won't benefit many families in our state. It will and I'm happy for them. According to statistics on Cantwell's website, families can expect an average savings of $519 - $575.

Here's the fly in the ointment: To claim your extra $500 or so, you must itemize and a great deal of working families don't have enough deductions to file a Schedule A. To make itemizing worthwhile, a couple filing jointly must have at least $6,600 in qualified expenditures.

Few families that gross $30,000 or less (like my family) have anywhere near that amount of itemized expenses. Therefore, we take the standard deductions and we don't benefit from this legislation at all! We don't get ANY of the money back that we paid in sales tax.

In other words, far from being a boon for "working" families, this savings most often will go in the pockets of the middle and upper classes, those of means.

Like it is often said, the devil is in the details.

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