The House on February 10 approved, 268-148, legislation (H.R. 6) designed to alleviate the marriage tax penalty (see The Source, 2/4/00). The bill would reduce tax revenues by $182 billion over ten years.
Before passing the bill, the House defeated, 192-233, an alternative Democratic proposal that would have reduced tax revenues by $95 billion over ten years.
With H.R. 6 sponsored by House Ways and Means Committee Chair Bill Archer (R-TX) and the alternative sponsored by the committee’s ranking member Rep. Charles Rangel (D-NY), debate over the measures was highly partisan. Saying the current tax code punishes married couples and discourages others from marrying at all, Republicans described their bill as a valentine for American couples. Democrats stated that they favor elimination of the marriage tax penalty, but claimed H.R. 6 is too broad, providing a tax reduction for all couples across the board—even those who benefit from the marriage bonus created in a previous effort to address the penalty. In addition, Democrats criticized Republicans for moving a tax measure before the FY2001 budget resolution had been produced.
Several women Members participated in the debate, with Reps. Deborah Pryce (R-OH), Jennifer Dunn (R-WA), Pat Danner (D-MO), Marge Roukema (R-NJ), Tillie Fowler (R-FL), Barbara Cubin (R-WY), and Nancy Johnson (R-CT) speaking in favor of H.R. 6. Reps. Rosa DeLauro (D-CT), Lynn Woolsey (D-CA), Sheila Jackson Lee (D-TX), Carolyn McCarthy (D-NY) and Del. Eleanor Holmes Norton (D-DC) spoke against the bill.
Describing the marriage tax penalty as “unfair and discriminatory,” Rep. Pryce said: “It is hard to find a good reason to tax marriage and penalize the most fundamental institution in our society. Still, each year 42 million working Americans pay higher taxes simply because they are married.”
Rep. DeLauro said H.R. 6 “goes far beyond the marriage tax penalty,” adding that it “not only squanders the surplus, it fails to provide true marriage penalty relief. In fact, over 70 percent of the tax relief in their bill goes to the wealthiest Americans, most of whom do not even pay a marriage penalty.”
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. H.R. 6 aims to address that discrepancy with several provisions that also were 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 tax 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.
Treasury Secretary Larry Summers has already indicated that he would recommend a veto if the bill is approved by both chambers. The President has advocated a different approach to the marriage tax penalty; he advocates doubling the standard deduction for married two-earner couples.
