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House Approves Permanent Marriage Tax Relief

On June 13, the House approved, 271-142, legislation (H.R. 4019) that would make permanent the marriage tax penalty relief provisions included in the tax cut law (P.L. 107-16) enacted last year. Debate on the bill was rancorous and highly partisan, with opponents arguing that the tax measure would raid the Social Security trust fund and that the bill was merely an election-year ploy to give the majority party an advantage.

Under current law, the basic standard deduction for married couples filing a joint tax return will increase to twice the standard deduction for a single individual by 2009. The increase is scheduled to be phased-in over five years beginning in 2005.

The law also phases in an expansion of the 15 percent bracket for married filers. Starting in 2005, the threshold for married couples will gradually increase to double the corresponding threshold for single filers. After the phase-in, married couples will pay 15 percent on income up to $54,100.

Additionally, the law expands the Earned Income Tax Credit (EITC) for low-income married couples. Starting this year, the income level at which the EITC begins to decline for married couples will increase by $1,000 through 2004, and by $2,000 in tax years 2004-2007, and by $3,000 in 2008. All of the tax breaks in last year’s tax package, including the marriage penalty relief provisions, are scheduled to expire on December 31, 2010. Under H.R. 4019, the sunset for marriage tax breaks would be repealed.

The House rejected, 205-223, an amendment in the nature of a substitute by Rep. Robert Matsui (D-CA) that, like the bill, would have made the marriage tax penalty relief provisions permanent. The substitute, however, would have required the Office of Management and Budget to substantiate that no Social Security trust funds would be used to fund the bill.

Arguing against the bill, Rep. Karen Thurman (D-FL) posed a question: “Is it not interesting that last night on this floor, in instructions to the conferees on the energy bill, what was the instruction? That we would not dip into Social Security.” She continued, “Yet, today, we come to the floor with a marriage tax penalty, a $300 billion deficit and guess what we find? We know that this will go into the Social Security and Medicare trust funds at the time that we will have the largest retirement happen.”

“The marriage penalty is discriminatory to working women,” said Rep. Jennifer Dunn (R-WA), speaking in favor of the bill. “Women who make a salary that is on par with their husbands are taxed in an extraordinary way, and the reason is that their additional salary upon marriage moves in to combine and thrust the young couple into a higher marginal rate,” she continued, and added, “In today’s society, we see 70 percent of young women, women with young children, in the workforce, so it has become increasingly a more and more common problem for all young people.”

Rep. Rodney Frelinghuysen (R-NJ) agreed. “The marriage penalty tax weakens the foundation of one of society’s most sacred institutions: marriage,” he said. “We cannot turn back the clock after making such great strides in providing this sensible, meaningful tax relief, and in the year 2011, force working couples to pay higher taxes simply because they choose to be married,” he added.

“Do Democrats support marriage penalty relief?” asked Rep. Steny Hoyer (D-MD). “Of course we do,” he said, and added, “But why now?” He pointed out, “There are only two weeks left before the 4th of July break, and we have not considered one of the 13 must-pass appropriations bills.”

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