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| MARRIAGE PENALTY | |
 February 10, 2000 
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ANNOUNCER: Now Hotpoint presents America's
favorite family comedy "The Adventures of Ozzie and Harriet."
KWAME HOLMAN: Bill Archer, chairman of the House Ways and Means Committee, put marriage penalty tax relief at the very top of his "to do" list when his committee returned to work last week. REP. BILL ARCHER: And fixing the marriage penalty would be the best Valentine's Day's present we could give to millions of couples.
REP. BEN CARDIN, (D) Maryland: We're in this situation because a prior Congress, before I was a members, decided we wanted to do something to help married couples primarily where one person worked and one person did not. It was a good social policy at the time. So we provided a marriage bonus. And now we have the problems of marriage penalty. KWAME HOLMAN: Here's why. A husband with an annual income of $25,000
for example would pay a 15-percent tax on all of it. However, if his
wife also earns
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| The tax code and women | ||||||||||||||||||||
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LINDY PAULL, Joint Committee on Taxation: There are statistics out there...there are studies out there that indicate that half the families who file joint returns do receive a marriage bonus. KWAME HOLMAN: Still, committee members agreed something needed to be done to provide at least partial relief from the marriage penalty. And so Chairman Archer offered a plan on behalf of committee Republicans, and New York's Charles Rangel proposed a plan for the Democrats. REP. CHARLES RANGEL: Mr. Chairman I'm afraid this thing is getting a little too political here. (laughter)
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| The Democrats' Plan | ||||||||||||||||||||
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KWAME HOLMAN: The Democrats' plan, similar to President Clinton's, would raise the standard deduction for married couples to twice the deduction for single taxpayers, and expand the Earned Income Tax Credit. Overall, the proposal would benefit mostly lower and middle income families. Committee Republicans argued it would give little relief to couples who itemize when they file a return.
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| The Republican Plan | ||||||||||||||||||||
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KWAME HOLMAN: The Republican plan also would raise the standard deduction
for married couples and increase the earned Income Tax Credit. But in
addition, it REP. JERRY KLECZKA, (D) Wisconsin: We find out that over half of the benefits go to those who aren't even paying a penalty. In fact, it's a bonus on bonus. For the person in my district who's looking for some marriage penalty relief, when they find out that 84 percent of the benefits of this bill go to those over $75,000 or those earning $75,000 or more a year, they're not going to be very supportive of this. REP. JERRY WELLER, (R) Illinois: Let's wipe out the marriage tax penalty for everyone. It's all about fairness in the tax code. KWAME HOLMAN: The partisan debate continued today on the floor of the House of Representatives as Republicans kept their promise to bring Marriage Penalty Tax reform to a vote before Valentine's Day. REP. BILL ARCHER: We should fix the marriage penalty right now. Married couples shouldn't have to wait one day longer to be treated fairly by the tax code. KWAME HOLMAN: Democrats came prepared with a long list of issues to argue, including the cost of the Republican plan: $182 billion over ten years.
KWAME HOLMAN: Illinois Republican Gerry Weller also came prepared, armed with individual statistics aimed at each democrat who stood and spoke against the Republican plan. REP. JERRY WELLER: My friend votes against this bill 61,000 married couples, one half of whom are itemizers in the 12th congressional district of Michigan, will not get relief from the marriage tax penalty. You may be able to explain that to them, but I sure can't. KWAME HOLMAN: The Republican tactic appeared to wear on the Democrats.
KWAME HOLMAN: But not all Democrats stood against the Republican plan. REP. PAN DANNER, (D) Missouri: You know, there is an old saying, death and taxes are both certain, but death isn't annual. Let us each pledge to bring an end to this unfair and costly tax burden, which is annually placed on married couples. I can certainly think of no better gift that this Congress can give the American taxpayers as we close in on Valentine's Day than to vote for HR 6, the Marriage Penalty Relief Act of 2000. KWAME HOLMAN: Late this afternoon, the Republicans' marriage penalty relief bill easily passed the house, picking up the votes of dozens of Democrats. But the measure's future is far from certain. President Clinton opposes the Republican approach, and the Senate may decide to take up the marriage penalty only as part of overall tax reform in the weeks and months ahead. |
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KWAME
HOLMAN: There was a time when TV's "Ozzie and Harriet" was
the model of family life in America. Ozzie was the not-so-hard working
dad, Harriet, the stay-at-home mom. Not only did their marriage appear
strong it also received a sizable tax break from the IRS. A family with
one predominant wage earner still gets a tax break today. But now, more
often than not, both spouses are wage earners and in many cases they're
hit with a federal income tax "penalty" because of their married
status.
REP.
BILL ARCHER, Chairman, Ways & Means Committee: Almost 25 million
married couples pay an average 1400 dollars more a year in higher taxes
just because their married. And that's wrong.
KWAME
HOLMAN: Congress has struggled to balance taxes on singles and couples
ever since it established the income tax in 1913. Fifty years ago it
allowed married couples to lower their taxes by filing a joint tax return.
Middle income couples benefited most. But over the past 30 years, a
dramatic increase in the number of women entering the workforce has
tilted the tax code against many two-income couples.
$25,000,
only the first $18,050 of her income is taxed at 15 percent. Her remaining
income reaches into the next, higher bracket and is taxed at 28 percent.
That's because the couple's "combined" income exceeds the
ceiling for the 15 percent tax bracket by nearly $7,000. The couple
ends up paying 13 percent more in taxes on that money than if they were
single -- filing as individuals. Their marriage penalty is $904 a year.
REP.
NANCY JOHNSON, (R) Connecticut: As a young woman thinking about going
to work and I see this all of the time and I see it in the eyes of the
young women who come and say to me, look I've stayed home with my kids
for a while and now I want to go back to work. I have to start part
time because I have to care for my kids or I've got to start a low paying
job. And when you see what it does to us -- what happens when we get
pushed into the next bracket? You know my husband says to me don't go
to work; you'll increase our taxes. How insulting! I'll tell you our
tax code and the penalty that it levies on married couples is not only
cruel and unusual but it strikes at the dignity of women.
KWAME
HOLMAN: But Congress is reluctant simply to scrap that part of the tax
code that causes the marriage penalty because it is the same provision
that still provides a "bonus" to slightly more married couples.
REP.
JERRY WELLER: The primary reason that most middle class families itemize
their taxes is homeownership so if we only help those who do not itemize
one half of married couples who suffer the marriage penalty essentially
we're creating a whole new class of folks suffering the tax penalty
and that's the homeowner marriage tax penalty and we certainly don't
want to do that.
would
expand the lowest income tax bracket for couples -- the 15-percent rate
-- to include higher income levels -- doing so gradually until it's
double the level for single filers. Under this proposal couples currently
paying a marriage penalty would get relief, while couples who receive
a bonus would get an additional tax break. Democrats argued against
that.
REP.
SANDER LEVIN, (D) Michigan: You have the cart before the horse. You
have this before Social Security and Medicare relief. The President
is going to veto this with red ink because that's what you would lead
to without thinking through where all of this leads, without telling
us what is the rest of your plan.
REP.
CHARLES RANGEL: Mr. Speaker, it's been pointed out that Mr. Weller has
92,571 constituents who are Social Security beneficiaries, and certainly
if you're just going to go after giving tax relief, you really don't
care anything about them and those on Medicare.