Many states are struggling with high, regressive property taxes these days. In an effort to relieve that burden, U.S. Senator Bernie Sanders (I-VT) authored legislation today on the floor of the Senate to provide $21.5 billion of property tax relief to states. Specifically, his bill would have restored the income tax rate on income above $1 million a year to pre-Bush-tax-cut levels, and put the $21.5 billion savings into grants to states for special education - the program that is directly connected to high property tax rates.
Some background: Because the federal government mandates states provide the special education funding that the federal government refuses to provide, states are forced to primarily pay for this gap through higher property taxes. As Sen. Ben Nelson (D-NE) has noted years before he voted against Sanders legislation today, federal underfunding of special education leaves states "to cover the shortfall, placing a greater strain on local property taxes."
As Sanders noted on the Senate floor, roughly 3/10ths of 1 percent of Americans make more than $1 million per year, while tens of millions of Americans are being hit with regressive property taxes. In other words, this bill was a slight tax increase on a small handful of millionaires in order to provide real and much-needed property tax relief to average Americans. Yet, incredibly, this simple amendment was voted down in the Democratic Senate.
Every Republican voted against the amendment - not a surprise considering their open embrace of regressively high taxes on ordinary Americans. Here are the key Republicans up for reelection in 2008, and how much in property tax relief for their state's taxpayers would have gotten from this amendment (the data is from the Congressional Research Service passed on to me by a Senate source). This is a major opening for Democratic challengers in these states to hammer these Republicans on the tax issue:
Chambliss (R-GA) - Voted against $592.7 million in property tax relief for Georgia taxpayers
Coleman (R-MN) - Voted against $357.5 million in property tax relief for Minnesota taxpayers
Collins (R-ME) - Voted against $101.5 million in property tax relief for Maine taxpayers
Dole (R-NC) - Voted against $592.7 million in property tax relief for North Carolina taxpayers
Domenici (R-NM) - Voted against $171.6 million in property tax relief for New Mexico taxpayers
Hagel (R-NE) - Voted against $140.2 million in property tax relief for Nebraska taxpayers
McConnell (R-KY) - Voted against $297.2 million in property tax relief for Kentucky taxpayers
Smith (R-OR) - Voted against $242.8 million in property tax relief for Oregon taxpayers
Sununu (R-NH) - Voted against $89.3 million in property tax relief for New Hampshire taxpayers
Voinovich (R-OH) - Voted against $824.3 million in property tax relief for Ohio taxpayers
Warner (R-VA) - Voted against $530.4 million in property tax relief for Virginia taxpayers
Sadly, this is not the whole story. Eleven Senate Democrats provided the margin for Republicans in killing this property tax relief bill.
You can see the full vote here.
See the full state-by-state list of property tax relief this legislation would have provided at:
I am optimistic about the new Congress's willingness to better represent middle-class interests. But I must admit, when one-fifth of the Senate Democratic Caucus goes on record protecting tax cuts for the 1/3rd of 1 percent of Americans making over a million dollars a year and voting against property tax cuts for tens of millions of ordinary Americans, my optimism is, ahem, shaken.