U.S. Sen. Evan Bayh on Wednesday said a proposal to give tax relief to Hoosier homeowners is expected to pass the Senate this week.
Bayh said the legislation also has a good prospect of passing the U.S. House and being signed into law by President Bush.
"It would provide a deduction of up to $500 per person and $1,000 per family," Bayh said. "This is a time of financial stress for many Americans and Hoosiers, compounded by a rise in property taxes that has dramatically outstripped inflation over the last six years."
He said the legislation will help the approximately 942,000 Indiana property owners who take a standard deduction on the federal income tax. Current tax law only provides homeowners with targeted tax reductions if they itemize their deductions. Under the new bill, they will get a deduction regardless.
Bayh, who introduced the legislation last fall, said it is unfair that a small percentage of Hoosiers in higher income brackets can reduce their federal income-tax burden in this manner while many middle class families cannot.
The amount of the breaks will depend upon homeowners' income and the amount of property taxes paid. He said a typical family paying $1,200 in property taxes that doesn't itemize and makes between $65,100 and $131,450 a year would receive $250 in tax relief.
Bayh said the bill has bipartisan support, but similar bills in the past were unsuccessful because such measures would cost the U.S. Treasury billions of dollars in revenue.
A Bayh spokesman said the bill had not been called for a Wednesday evening vote but might be called late Wednesday night.
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