Ways and Means to Advance Marriage Penalty Relief Bill

The following article is provided courtesy of CCH, Inc.

The House Ways and Means Committee plans to mark up marriage penalty relief legislation on March 22. Committee member Jerry Weller, R-Ill., said at a March 21 committee hearing that relief from the marriage penalty in the tax code should be a main priority of this Congress. "The marriage tax penalty exacts a disproportionate toll on working women and lower income couples with children." Sen. Kay Bailey Hutchison, R-Texas, added that married couples "are being penalized by our tax code for no apparent reason other than because they are married."

Weller's bill, the Marriage Tax Elimination Bill of 2001 (HR 6), would double the standard deduction to twice that of singles and also would widen the 15% income tax bracket to provide relief from the marriage penalty for those who itemize their taxes as homeowners. In addition, the bill would provide marriage penalty relief for the working poor who benefit from the earned income credit and ensure that taxes do not rise because of the proposal and its relationship to the alternative minimum tax, said Weller.

Committee Chairman William M. Thomas, R-Calif., has said that the committee will consider an additional tax measure before the House leaves for its Easter/Passover recess and another measure following the recess. The goal, Thomas has said, is to enact all of the major components of President Bush's $1.6 trillion tax plan.

However, Wendell Primus, with the Center on Budget and Policy Priorities, said in written testimony that the Bush tax proposal "provides no marriage penalty relief to many families that face the highest marriage penalties and does nothing to equalize the tax treatment of marriage and cohabitation." He also said that the Bush plan to double the $500-per-child tax credit would not help many low-income families. "One-third of children would not benefit from the expansion of the child tax credit," he said, adding that "the proposal to double the child tax credit would be of little or no help to millions of children in low-income working families."

Another provision in Bush's plan that the committee plans to take up is elimination of estate taxes. Bob Stallman, president of the American Farm Bureau Federation, said eliminating death taxes "is the top tax priority" of the federation. Many family farms are at risk unless death taxes are repealed, he said. "The impact of death taxes, with rates as high as 55%, is so severe that its imposition can destroy farm businesses," he said in written testimony.

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