On April 28, the House approved, 323-95, a bill (H.R. 4181) to make permanent certain provisions in the 2001 Economic Growth and Tax Relief Reconciliation Act (P.L. 107-16).
Under the 2001 law, the standard deduction for married couples would gradually increase through 2009 until it is double that of single taxpayers. The measure also phased in an increase in the upper limit of the 15 percent tax bracket for couples until it is twice that of singles in 2009. All of the provisions in the 2001 tax law are set to expire on December 31, 2010.
Last year, Congress approved a tax package (P.L. 108-27) that included provisions to temporarily accelerate the implementation of the tax cuts in the 2001 law (see The Source, 5/23/03). The measure expanded the 15 percent tax bracket and standard deduction for married couples to twice that of single taxpayers for 2003 and 2004. The marriage tax penalty relief provision will sunset in 2005.
Sponsored by Rep. Jim Gerlach (R-PA), H.R. 4181 would make permanent the marriage tax penalty relief provisions in the 2001 and 2003 tax laws. The bill also would make permanent provisions in the law that increase the beginning and ending points of the earned income tax credit (EITC) income phase-out for married couples filing jointly by $1,000 in each of years 2002, 2005, and 2008.
During consideration of the bill, Rep. Charles Rangel (D-NY) offered a substitute amendment that would have made permanent the marriage tax penalty relief provisions in the 2001 and 2003 tax laws. The substitute also would have made permanent the increase in the EITC income phase-out and accelerated the phase-in of the $3,000 increase so that it would have been effective beginning in 2005. Finally, the substitute would have provided that provisions in the bill regarding the marriage penalty would not affect whether a taxpayer owes the alternative minimum tax. The substitute would have been offset by applying a 3.6 percent surtax on individual taxpayers with annual incomes of more than $500,000 and married couples with annual incomes of more than $1 million. The substitute was rejected, 189-226.
The House also opposed, 199-220, a motion to recommit offered by Rep. Charlie Stenholm (D-TX) that would have prohibited provisions in the bill from taking effect unless the secretary of the Treasury certifies that, upon enactment, the public debt limit is sufficient to allow for the increased borrowing required as a result of the measure.
Rep. Candice Miller (R-MI) said that in passing the measure, the House “is making a statement that we as lawmakers will not stand for a Tax Code that punishes married couples. To place an additional tax burden on married couples simply because they are married is crazy. The Federal Government cannot be passing tax laws which are designed to drive people apart rather than bringing families together. It is counterintuitive.”
Calling the measure “fiscally irresponsible and inadequate,” Rep. Pete Stark (D-CA) explained that the substitute “provides more marriage penalty relief to 13 million families than the GOP bill by ensuring that tax relief from the marriage penalty is not taken away or reduced by the alternative minimum tax. The Republican bill denies full marriage penalty relief to 13 million families next year, including more than 25 percent of the middle-class families making $75,000 to $100,000, by failing to fix the inequities caused by the current alternative minimum tax system.”
