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Marriage Penalty 

Under current tax law, some married couples pay more income tax than they would as two unmarried singles- this is known as the marriage tax penalty.  The House of Representatives took up two bills to repeal the marriage tax penalty on March 29, 2001.  The first bill eliminated the marriage penalty and doubled the current $500 per child tax credit, but a large part of the bill required several years to phase in, with some portions of the bill not fully phasing in until 2009.  In addition, this bill did not offer sufficient relief to certain families- for example, families with two children and incomes less than $27,000 would receive NO tax relief from the child credit provisions at all.  Some families would never see the full benefit of the increase of the child tax credit because by 2006 when it is fully effective, their children may no longer be eligible because they will have grown too old to qualify!  The total cost of this first bill was $400 billion over 10 years. 

I voted for a second bill which more fully addressed the marriage tax penalty and the needs of families.  It provided an across-the-board rate cut by lowering the 15% tax bracket to 12% for the first $20,000 of taxable income for married couples (equal to about $41,000 of total income for a couple with two children) and $10,000 for single people (equal to about $17,500 in total income). This new bracket would be fully phased in by 2003.    

The provisions in the second bill also ensured relief for the many taxpayers that pay more payroll taxes than income taxes, by expanding the current earned income tax credit to offset some of the burden of these payroll taxes for working families with children.  This bill enacted tax cuts sooner, in a responsible budget framework, and with attention to the alternative minimum tax. 

Ultimately, the House passed the first bill, but it was not acted upon by the Senate.  Rather, provisions to eliminate the marriage penalty tax were included in the $1.3 trillion tax cut bill that passed the House last year.  I continue to believe that reducing the marriage penalty is the right thing to do, but it must be part of a responsible budget framework that ensures sufficient resources for vital programs.