On February 10, the House is likely to take up legislation (H.R. 6) designed to alleviate the marriage tax penalty. In a party-line vote of 23-13, the measure was approved by the House Ways and Means Committee on February 2.
Due to a glitch in current tax law, some married couples filing a joint return pay more in income tax than they would have been required to pay as individuals. Sponsored by Ways and Means Committee Chair Bill Archer (R-TX), H.R. 6 aims to address that discrepancy with several provisions that were also included in an omnibus tax measure (H.R. 2488) vetoed last year by the President.
H.R. 6 would increase the standard income tax deduction for married couples filing jointly, making it equal to twice the standard deduction for single filers. Under the bill, the standard deduction for married taxpayers would be $8,800, an increase of $1,450 over the deduction allowed under current law.
The bill also would phase-in an expansion of the lowest income tax bracket, the 15 percent bracket, for married filers. For the 2000 tax year, the 15 percent bracket would include married couples with an annual income up to $43,850 and individuals with an income up to $26,250. The threshold for married couples would eventually be increased to $52,500—double the corresponding threshold for single filers.
In addition, H.R. 6 would expand married couples’ eligibility for the Earned Income Tax Credit (EITC). Currently, married filers with an annual income of more than $30,580 are ineligible for the EITC; the bill would raise that ceiling by $2,000.
During the February 2 mark-up, Rep. Archer said approximately 25 million couples pay the marriage tax penalty each year, paying $1,400 more on average. “The tax code is tough enough on Americans as it is, and it shouldn’t discourage couples who want to get married,” he said.
Rep. Archer also referred to a letter written by Treasury Secretary Larry Summers, indicating that he would recommend a presidential veto of H.R. 6. Rep. Archer criticized that position, adding that the President called on Congress to remedy the marriage tax penalty during his January 28 State of the Union address.
Committee Democrats responded by saying that the President advocates a different approach to the marriage tax penalty, charging that H.R. 6 would benefit higher-income married couples disproportionately. Rep. Ben Cardin (D-MD) said, “Half of the people who are going to get tax relief under this bill are already getting the marriage bonus that we created several years ago in an effort to address this problem.”
In addition, Rep. Charles Rangel (D-NY) said, “This is the first time in my 29 years in Congress that I have seen a mark-up on a major piece of tax legislation before we discuss the budget resolution.” Several Democratic lawmakers questioned whether the budget rules would allow the full House to consider the bill under those circumstances. Rep. Jim McDermott (D-WA) said, “We might as well junk the Budget Committee. It is a stupid committee to have [if tax bills move before the budget resolution].”
Rep. Jennifer Dunn (R-WA) said that “89 percent of the American public thinks the marriage tax penalty is unfair,” adding: “There are many ways to solve the marriage tax penalty, but this plan puts money back in the pockets of married Americans.” Rep. Nancy Johnson (R-CT) echoed Rep. Dunn’s call for action on H.R. 6, saying, “Women in America desire the dignity of marriage and we should provide this relief for American families.”