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Washington, D.C. - U.S. Senator Susan Collins spoke from the Senate floor this afternoon to urge her colleagues to support four amendments she introduced to the Senate tax reform bill that would strengthen the legislation in important ways for middle-income Americans.
“By reforming our nation’s tax code, we can reduce the tax burden on hardworking Americans and help spur job creation and economic growth,” said Senator Collins. “My amendments would improve upon the Senate’s current tax reform proposal by allowing filers to deduct state and local property taxes, protecting retirement benefits for employees of nonprofit organizations and local governments, making the Child and Dependent Care Tax Credit refundable, and reducing the threshold for deducting medical expenses. These amendments would provide essential tax relief for many middle-class families in Maine and across the country.”
Senator Collins’ first amendment would allow taxpayers to deduct up to $10,000 in state and local property taxes. In recent years more than 95 percent of all itemizers, and 28 percent of all federal income tax filers, deducted state and local taxes, including property taxes. Yet, the Senate bill would eliminate this deduction altogether. This deduction is especially important to Maine, where 166,000 itemizers deducted a total of $725 million in property taxes on their federal income tax returns each year. Senator Collins’ amendment would allow the vast majority of Mainers who itemize to fully deduct their property taxes.
The second amendment Senator Collins introduced would strike a provision that could reduce the retirement benefits of church, charity, school, and government employees, including firefighters, teachers, and police officers. As drafted, the Senate bill would eliminate critical tax rules that allow employees of nonprofits and local governments to make additional “catch-up” and “make up” contributions to their retirement accounts during and near the end of their careers. This amendment would protect these special rules to ensure those employees who serve the public achieve greater retirement security.
Senator Collins’ third amendment would improve the Child and Dependent Care Tax Credit by making it refundable, thus providing much-needed assistance to low-income working families. This would help many families afford high-quality child care or adult day care for older parents or other relatives who can no longer care for themselves.
Finally, Senator Collins introduced an amendment that would lower the threshold for Americans to deduct medical expenses. Currently, due to a provision in the Affordable Care Act (ACA), consumers can deduct medical expenses only if they exceed 10 percent of their income. Senator Collins’ amendment would restore the threshold to 7.5 percent, the level prior to the ACA, to help all taxpayers, and particularly seniors, who are struggling with high medical costs.