Representative George R. Nethercutt, Jr. Representative Nethercutt meets with a group of students on the steps of the Capitol Representative Nethercutt meets with a group of students on the steps of the Capitol Representative Nethercutt with two constituents Representative Nethercutt with two constituents Representative Nethercutt with two constituents Representative Nethercutt in the classroom Representative Nethercutt in the classroom Representative Nethercutt in the classroom
Representative George R. Nethercutt, Jr.
2004

Nethercutt: ‘Major victory’ on sales tax relief for Washingtonians
Relief comes as part of plan to end tariffs on exporters, create jobs

October 7, 2004

WASHINGTON – U.S. Rep. George R. Nethercutt Jr. (R-Wash.) said Washington taxpayers and small businesses scored a big win tonight as the U.S. House of Representatives approved a final version of a plan to provide sales tax relief to Washingtonians and create jobs by giving companies incentives to invest in America. The plan would also end escalating tariffs harming U.S. exporters.

H.R. 4520, American Jobs Creation Act of 2004, passed the House by a vote of 280-141. The bill is expected to pass the Senate tomorrow, and soon be signed by the President.

“The plan provides tax relief to thousands of Washingtonians, allowing them to deduct their sales tax on their federal tax returns for the first time in almost 20 years,” Nethercutt said.

“This is a major victory for Washington families. This will save each Washingtonian who itemizes an estimated $500 per year,” he continued. “At tax time next year, families will be able to keep more of their hard-earned money instead of sending it to the IRS. We are returning fairness to the tax code for Washingtonians after 18 years of inequity.”

According to a report by the Congressional Research Service, the potential savings for Washington taxpayers who itemize on their federal returns is $488-541 million each year for the next two years. This could save families an average of $519-$575 per itemized tax return filed.*

Nethercutt said the plan will help boost Washington’s economy and create jobs by reforming the tax code to end escalating tariffs hurting U.S. exporters.

“In our state, jobs depend on trade. Today’s vote improves the jobs climate for Washington’s exporters and will help spur investment in our economy,” Nethercutt said.

The House-passed bill ends European Union sanctions against American exports by repealing the Foreign Sales Corporation-Extraterritorial Income Tax law. The plan compensates for lost benefits to American exporters by providing pro-growth tax relief for domestic manufacturers, producers, farmers, and small companies. The plan also includes other pro-growth tax incentives, including Alternative Minimum Tax relief, for manufacturers, small businesses and farmers, to help create more American jobs.

“This plan is key to creating more jobs in Washington State,” Nethercutt said. “It will remove tariffs on our large manufacturers, like Boeing, and will help our small manufacturers, farmers and fishermen.”

Independent analysis suggests this measure will generate $400 billion of new investment in America's economy in 2004, create approximately 500,000 new jobs, boost stock prices by 4.5 percent, and add more than 1 percent to the Gross Domestic Product (GDP).

“More jobs are being created in Washington State, but we still have work to do. There are still thousands of people looking for work in our state. This plan will help businesses create jobs and will help our economy grow by giving families more money back on their tax return next year,” Nethercutt said.

Nethercutt noted the bill does not add to the deficit. Closing corporate tax loopholes and shutting down abusive tax shelters offset the tax relief provided in the bill.

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* CRS calculates potential taxpayer savings under that assumption that the average itemizing taxpayer is in a hypothetical 28% and 31% marginal income tax bracket for the 2000 Tax Year. Total potential taxpayer savings, per year in Washington State, under this formulation equal $488 million (28% rate) and $541 million (31% rate). Approximately 940,000 itemized returns were filed in 2003 in Washington, with an average potential taxpayer savings, per itemized return, per year, of $519-$575. [488,000,000/940,000=$519; 541,000,000/940,000=$575]