On June 28, legislation (as-yet-unnumbered) designed to alleviate the marriage tax penalty was approved by the Senate Finance Committee in a party-line vote of 10-5.
Opening the mark-up, Committee Chair William Roth (R-DE) said, “If some members of the committee have a feeling of déjà vu, it’s understandable.” Another bill (S. 2346) containing the same basic provisions was approved by the committee on March 30 (see The Source, 3/31/00). Sen. Roth is the sponsor of both measures, which aim to fix a glitch in current tax law. Due to the glitch, some married couples filing a joint return pay more in income tax than they would have been required to pay as individuals.
Technical changes were made in the newly-approved package so that it will comply with the budget reconciliation instructions included in the FY2001 budget resolution (H. Con. Res. 290). Measures debated as part of budget reconciliation move under special rules barring unrelated amendments and limiting debate to 20 hours.
During the mark-up, the committee also voted to defeat, 9-11, a substitute amendment offered by Sen. Daniel Patrick Moynihan (D-NY). The substitute reflected a proposal from the President, which would allow married couples to file joint returns while being taxed individually.
Sen. Moynihan and other Democrats asserted that Sen. Roth’s approach would provide benefits for taxpayers who are not affected by the marriage tax penalty. Sen. Richard Bryan (D-NV) said the Republican bill is a broad tax-break plan that “masquerades as marriage penalty tax relief.” He cited an estimate that 58 percent of those who would be affected by the bill do not currently experience the marriage tax penalty.
Sen. Don Nickles (R-OK) responded that the bill would provide “the fairest way” to end the marriage tax penalty. Sen. Phil Gramm (R-TX) added: “We’re for love and we’re for marriage, and this bill gives you more of both.”
The committee did not consider an amendment reflecting the President’s plan to provide prescription drug coverage for Medicare beneficiaries, although Sen. John Rockefeller (D-WV) had been expected to offer such an amendment.
Sen. Roth warned that he would rule it nongermane to the marriage tax penalty bill. However, he announced plans for the committee to mark up a separate Medicare drug coverage bill when Senators return from the Fourth of July recess. Sen. Rockefeller told the committee, “I want a prescription drug benefit.” Sen. Roth stated, “There is no one on the committee more interested in Medicare reform and a prescription drug benefit bill than I am.”
In April, S. 2346 was debated on the Senate floor, but Majority Leader Trent Lott (R-MS) eventually pulled the bill from consideration when he reached an impasse with Minority Leader Tom Daschle (D-SD) regarding the number of amendments to be offered by Democrats (see The Source 4/14/00).
Another marriage tax penalty bill (H.R. 6) was approved by the House on February 10 (see The Source, 2/11/00). The Senate version would reduce federal tax revenues by $240 billion over ten years, while the House bill would cost $182 billion over ten years.
