Despite record -- and increasing -- deficits, the Republican Congress has acted again to recklessly expand the deficit.

The Congress as part of the "FSC/ETI JOBS bill", passed into law in October, now allows taxpayers to choose whether to deduct state income tax or state sales tax. Taxpayers are not allowed to deduct both.

In addition to expanding the deficit by $21 billion over ten years, Congress has implemented the provision in a grossly unfair manner.

Low-income tax payers, who typically do not itemize deductions, will so no benefit at all. Middle-income taxpayers will be given a choice: pick a standardized deduction or save all their receipts as evidence of actual tax paid. Meanwhile, anyone able to afford a yacht or other luxury item will enjoy full deductibility.

Additionally, this provision now penalizes Blue State residents -- many of whom pay income tax and sales tax. While a Texas resident may be able to deduct all state taxes paid, the Minnesota resident will be forced to choose whether to deduct income tax paid or sales tax paid.

A fair system would treat all taxpayers equally. A just system would not force our children to pay our taxes. Clearly, the Congress was interested more in partisanship than fairness or justice.

From the Knoxville News Sentinel/AP

A provision that would allow Tennesseans and residents of six other states to deduct sales taxes on their federal tax returns made it out of conference committee Wednesday and moved to the House and Senate.

The change is part of a bill that rewrites corporate tax law and includes a $10.1 billion buyout of tobacco farmers.

But a push to permit first-time government regulation of tobacco products as part of the buyout was removed by the conference committee.

Lawmakers in the seven states without an income tax have sought the sales tax benefit, which was taken away nearly 20 years ago in another federal tax overhaul. The other states without a general income tax are Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

"Restoring the deductibility of the sales tax has been a six-year effort for me," first-term U.S. Rep Marsha Blackburn, R-Tenn., said in a statement. "We started this battle for tax fairness during the state income tax debate and today the hard work is paying off. ... I'm hopeful we'll see this deduction in law very soon."

The change would benefit Tennesseans who itemize deductions on their federal returns, about one in four state taxpayers, according to the Congressional Research Service. It estimated the tax benefit would average $470 for those who itemize.

From the Heritage Foundation:

The House of Representatives is considering a proposal to create a federal tax deduction for state and local sales tax—a preference that would be available only to taxpayers who do not utilize the deduction for state and local income taxes. This is bad policy. It would give governors and state legislatures an incentive to increase sales tax rates. It would do nothing to help the economy grow faster. Indeed, it would almost surely have an adverse impact because it would facilitate an increase in the burden of state and local government.

Advocates say that the current tax system is unfair since it allows a federal tax deduction for state and local income and property taxes. This is an accurate assertion. States that rely on sales taxes are disadvantaged by the current system. But two wrongs do not make a right. The best way to remove this inequity is to disallow special deductions for all state and local taxes, particularly income taxes. States would then be treated equally, and the internal revenue code would not be a tool to promote higher taxes at the state and local level. It is important to understand, though, that removing the special tax preference for state and local income taxes should not occur in a vacuum. Instead, because this reform would result in about $500 billion of higher taxes over a ten-year period, it should be linked to tax reforms that reduce tax revenue by a similar amount. Instead of trying to “make a right with two wrongs,” this would be akin to killing two birds with one stone.