[Congressional Record Volume 146, Number 37 (Wednesday, March 29, 2000)]
[Senate]
[Pages S1847-S1849]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MARRIAGE TAX PENALTY

  Mrs. HUTCHISON. Mr. President, I rise today to talk about the 
marriage tax penalty. We are trying not so much to give a tax cut to 
married couples but to make a tax correction. It is not the business of 
Government to say that when you are married your taxes should be 
higher. The Tax Code should be blind.
  It should be fair to all. Any single person making $35,000 a year 
marrying someone making $35,000 a year should not automatically go into 
a higher tax bracket. In fact, under today's Tax Code, that is exactly 
what happens. It is one of the most egregious oversights of our tax 
system that we must address.
  It is estimated that 21 million married couples pay a marriage 
penalty; about 48 percent of people in this country who are married pay 
a penalty for being married. The question is, What can we do to correct 
that inequity? This is not just a tax cut. It is a tax correction.
  Yesterday, Senator Roth revealed his plan that will go to the Finance 
Committee for markup, hopefully, tomorrow. It is a very solid 
beginning. His plan, first and foremost, does something that will 
affect every single married couple: It doubles the standard deduction.
  Today, the standard deduction is $7,350 for a married couple. It is 
$4,400 for singles. One would think a married couple would get $8,800. 
That is not the case. They get $7,350. Regardless of the tax bracket, 
there is a marriage tax penalty from the standard deduction. Senator 
Roth's bill doubles the standard deduction next year.
  Second, the bill starts with the lowest tax bracket, the 15-percent 
bracket. Over a 6-year period, starting in 2000, that bracket will be 
doubled for married couples. This is an $8,650 increase that allows 
people to continue paying in the 15-percent level for $8,650 more. 
Basically, that means if someone today is making up to $43,000 as a 
married couple, they are in the 15-percent bracket. We raise that to 
$52,500. As a married couple making about $26,000 a year, they will 
stay in the 15-percent bracket and will not have that penalty.
  It is important for people to know that everyone pays up to the 
$52,000 in the 15-percent bracket. Even if you go up to the 28-percent 
bracket or the 36-percent bracket, you will also get that 15-percent 
bracket relief.
  It was my hope to double the 28-percent bracket, as well, because 
this is where most people get hit the hardest. A policeman who marries 
a schoolteacher gets hit in that 28-percent bracket. They are making 
approximately $30,000 each. They would not be fully covered under the 
bill that will go to markup.
  There will be opportunities to increase that bracket to 28 percent, 
which is what we hope to do. We want to go up to about $120,000 in 
joint income to do away with that penalty for married couples. We will 
take the 28-percent bracket up to about $126,000. A 28-percent tax 
bracket is almost a third of what a person makes, so with salaries of 
$40,000 or $50,000, it is a pretty big hit, especially if you have 
children and are trying to do the extras for their education.
  We have the 15-percent bracket doubling, starting in 2000. We want to 
make that 28 percent, but even if we can do the 15 percent, it is 
certainly a step in the right direction, saying to people they should 
not be penalized because they chose to get married. The penalty is not 
small. The average is about $1,400 more that people pay. If they are 
making $28,000 a year or $40,000 a year and have to pay $1,400 more in 
taxes, that is a lot of money, money that could be saved for the first 
downpayment on a house. It is money that could be put on car payments, 
mortgage payments, or a family vacation.
  This is the time in people's lives when they need the money the most, 
when they are a young couple, just beginning. They do not have a nest 
egg yet. To tax them $1,400 more a year is a heavy penalty. There is no 
reason for it. We should not make the choice for people that if they 
get married they must pay more taxes.
  The alternative minimum tax is also reformed in Senator Roth's plan. 
The alternative minimum tax is a tax that is levied on people. An 
alternative minimum tax is levied perhaps because too much of their 
income is tax free. This has begun to hit more and more people.
  The alternative minimum tax has begun to hit people who make $75,000 
a year as married couples. This keeps them from having the $500-per-
child tax credit fully given; it keeps them from getting the Hope 
scholarship money fully given; it keeps them from having an adoption 
credit fully given. It takes away the value of those credits.
  We say to people: You get a $500-per-child tax credit because we want 
you to have more of the money you earn, but if you make over $75,000 a 
year, we will take part of that credit away. We want to make those 
types of tax credits, the nonrefundable tax credits, whole for people, 
regardless of where they are in the system. We don't want the marriage 
tax penalty to encroach on that, as well. We are trying to exempt those 
nonrefundable tax credits from the AMT.
  We also increase the earned-income tax credit for low-income couples, 
so if a person chooses to go to work and get off welfare, which is what 
we are encouraging them to do, we don't want to punish them by taking 
away their earned-income tax credit.
  It is ironic that today we say to a married couple: You will pay more 
in taxes than if you had stayed single. We have a higher tax burden in 
our country today in peacetime than any time since World War II. We are 
trying to take away some of that tax burden on hard-working Americans. 
We find with many couples that both work because the tax burden is so 
high. They are trying to do extra things for their children. In order 
to meet all of their needs and the extra requirements they have for 
giving their children a good education, they are having to go to work. 
That second income is penalizing that spouse who decides to leave the 
home and go into the workplace.

[[Page S1848]]

  This is wrong. It is time to end this unfair part of our Tax Code. We 
started trying to correct this inequity 3 years ago. We sent President 
Clinton a bill that had marriage tax penalty relief in it and the 
President vetoed that bill.
  It is very important that President Clinton look carefully at this 
particular bill. It hits people at the lower and middle-income level. 
The President has said he is for income tax relief for middle-income 
people. He has said that in public statements. But, in fact, he has 
vetoed the marriage tax penalty relief we have sent him.
  I hope this is going to be a clean bill. I hope it will be a bill 
that is not amended with extraneous amendments that are not marriage 
tax penalty amendments. If we can send that clean bill, then I think 
the President will have some explaining to do if he does not sign it to 
give this relief to hard-working American couples.
  We are about 20 days away from having to file the income taxes for 
1999. April 15 is the day. April 15 is Saturday, so we get a reprieve 
until April 17. But when people are filling out their income tax 
returns in the next few weeks, I hope they will think of this marriage 
penalty that most people are paying in this country. I hope they will 
realize Congress is trying to give people relief. Congress is trying to 
double the standard deduction, so when you are filling out your form in 
the next 20 days, realize if you are married, your standard deduction 
is $7,350. Under our plan it would be $8,800 that would be totally 
exempt from taxation.
  Furthermore, we would give you about $8,000 more over the next 6 
years in the 15-percent bracket. So whereas today you would start going 
into that 28-percent bracket at $43,000, we are going to give you up to 
$52,000 over a 6-year period with the bill that is going into the 
Finance Committee tomorrow. We are hoping we can even expand that to 
the 28-percent bracket so more people will pay at the lower bracket 
levels. This will help every single tax-paying American who is married 
and paying this penalty.
  I hope very much the President of the United States is listening. I 
hope we can pass this clean marriage penalty bill through the Senate. 
We have a good start in the House bill. We have a good start from the 
Senate Finance Committee mark. I hope we can even make it better. With 
a relatively small addition, I think we can. I think we can go from the 
15-percent to the 28-percent bracket--doubling. That will give 
significant relief to the most taxpayers in this country. Most people 
pay in the 15- and 28-percent brackets. That is where I think we need 
the relief.
  I urge my colleagues to work with us on this marriage penalty relief. 
I urge the President to listen to the hard-working people of this 
country who are saying: We need relief, and most of all, we need 
fairness in our tax system. It is not fair to tax people because they 
are married.
  I see my colleague from Georgia is on the floor. My colleague from 
Georgia has been one of the early cosponsors of this marriage tax 
penalty relief. He has been a stalwart defender of fairness in our Tax 
Code and fairness in our tax system. I appreciate that he is here and I 
yield the floor to the Senator from Georgia.
  The PRESIDING OFFICER (Mr. Hutchinson). Under the previous order, the 
Senator from Georgia, Mr. Coverdell, or his designee, is recognized to 
speak for 30 minutes.
  Mr. COVERDELL. Mr. President, parliamentary inquiry: It is my 
understanding the Senator from Texas and the Senator from Kansas had a 
period of approximately 30 minutes before the 30 minutes that was 
assigned to me. At the moment, I will be speaking on that time, if 
there is any of that time remaining.
  The PRESIDING OFFICER. There is 14 minutes remaining.
  Mr. COVERDELL. Then, if I might, with that clarification, at the 
conclusion of my remarks and the remarks of the Senator from Texas or 
others on marriage penalty, then I will begin to implement the 30 
minutes that was assigned to me.
  Mr. President, first I thank the Senator from Texas for her 
perseverance in pursuing relief of the marriage tax penalty on so many 
millions of Americans. I have several general comments to make about 
this proposal at this time. Again, before she gets away, I thank the 
Senator from Texas for the drumbeat by which she has continued to 
pursue this issue because it is an exceedingly important policy issue. 
That is the first point I want to make.
  The fact we would have ever come to the point in the United States, 
given all the problems we have been talking about over these last 
several years of destabilization in our society, that we would punish 
people for creating families is unconscionable public policy. It is 
almost unbelievable it could have ever come to this point. So, as a 
matter of sound, intelligent, appropriate public policy, there should 
not be a penalty for people creating families. We should be 
encouraging, not discouraging, that. We should be making available to 
those families as many resources as possible to carry out the building 
of America upon which we have always relied. It is that family that we 
have depended upon to get America up in the morning, to get it to 
school and to work, to house it, to provide for the health needs and 
education of the country.
  The dreams of America are in the hands of these families. To punish 
them, to financially punish them, as I said a moment ago, is absolutely 
unconscionable public policy. It raises all kinds of questions about 
what kind of thinking goes on in this Capital City, for Heaven's sake. 
The punishment is not insignificant--about $1,400 a year on average. 
Start thinking of the things that would do: The home computers, tutors, 
a new mortgage, transportation. The average American family's 
disposable income, that which is left after the Government marches 
through their checking account and takes over half of it --in our 
State, that family is probably making about $45,000 to $50,000. By the 
time you take that down by half--then think of all the things they have 
to do to raise America, to take care of America--we have not left 
enough there to get the job done. No wonder we see so many problems in 
our society.
  If you were to put a graph behind me from 1950 to 1990 and show what 
the Federal Government was taking out of that checking account in 1950, 
and then what it is taking out in 1990, you would faint. If you put up 
a graph of every other problem--SAT scores, teenage suicide rates, you 
name it--as that graph went up, as we took more and more resources away 
from those families, bad things start to happen in our country. So 
there is nothing more important than making a statement that we are not 
going to punish families and we are going to take steps to leave more 
value, more of what they work for in their checking accounts so they 
can do what they need to do for America.
  If every little family can take care of itself, the country is in 
great shape. Conversely, if we make it difficult for these families to 
get the job done, the country starts to wobble a bit. It has gotten 
right close to wobbling.
  The other point I want to make is this: If we are going to talk about 
eliminating the marriage tax penalty, then we ought to be bold about it 
and serious about it. This proposal that is coming from the Finance 
Committee, and for which the Senator from Texas has fought, is just 
that.
  The President has used the name but no substance--the name, the sound 
bite--but it is not getting the job done. Clearly, if we are going to 
go before the country and say we are going to eliminate the marriage 
tax penalty, it ought to virtually get the job done.
  The proposal sponsored by the Senator from Texas, and which is likely 
to come out of the Finance Committee, will do that. The President's 
proposal does not.
  I hope this ultimately passes the Senate, that we work out any 
differences with the House, and it goes to the President's desk and he 
acknowledges that a marriage tax penalty is a bad thing, it is bad 
policy.
  I have one other comment to make about this before I yield back the 
remainder of the time to the Senator from Texas. I have not heard 
anybody refer to this, but this proposal is across-the-board tax 
relief. Why is that? Because it takes the bottom tax bracket where 
people pay 15 percent and increases substantially the amount of income 
any family can earn and only be taxed on that income at 15 percent. 
Every taxpayer will receive tax relief because they all pay 15 percent 
on the

[[Page S1849]]

first bracket. The first bracket is being enlarged. Everybody will 
benefit.
  Admittedly, by focusing on these earlier tax brackets, the amount of 
relief, while the same for everybody, is more meaningful to middle-
income families and lower-income families. This $1,500 is the 
difference between, as I said, the house or not, the car or not, proper 
education or not. For some of our wealthier citizens, it will not have 
that great an impact. They would make a different kind of decision 
about it. It is fair because it is across the board and it affects the 
entire 15-percent tax bracket. That is good. I want to see us do more 
of this where we are lowering the tax rates for all taxpayers.
  One of the things about which I have been most encouraged, because 
Americans pay vastly different percentages of income taxes--it has 
actually gotten to a very negative separation of our citizens. About 50 
percent pay very few taxes, and the top 5 or 10 percent pay inordinate 
taxes. That can lead into all kinds of problems.
  The good thing is, the American people, our culture, demand fairness. 
They really do. One can ask any American in our country, no matter the 
walk of life, their gender, or their racial background: What is a fair 
tax? It is always about the same. It doesn't matter where they come 
from or what their economic status is. They will say it should be about 
25 percent. It should not be 50. Americans are essentially fair, and 
that is good. That gives us the ground upon which to correct some of 
these onerous bad policies that are in the Tax Code. This is one of 
them. This is the right thing to do, as I said the other day, and it is 
the right time to do it.
  Mr. President, I yield back the remainder of time to the Senator from 
Texas.
  Mrs. HUTCHISON. Mr. President, parliamentary inquiry: What is the 
time remaining on my 30 minutes?
  The PRESIDING OFFICER. The Senator has 3 minutes remaining.
  Mrs. HUTCHISON. Mr. President, I thank Senator Coverdell for his 
remarks. He laid out the fairness question very well. I thank him for 
the leadership he has provided in trying to give tax relief to hard-
working American families on several fronts. Of course, he was the 
leader helping people give their children extra education benefits. 
Unfortunately, that bill was vetoed last year by the President, and 
hopefully, having passed it again this year, the President will give 
that area of tax help to the hard-working families who want to send 
their children to college or who want to buy a computer for their child 
in elementary school. That has been led by Senator Coverdell.
  Certainly, Senator Coverdell is now helping lead the effort on 
reduction of the marriage penalty tax because, of all the Tax Code 
inequities, this is the biggest. It affects the most people. It is the 
biggest tax cut that should be given. It is a fairness question.
  If one is a policeman and making $30,000 a year and marries a 
schoolteacher, why should they pay $1,400 more in taxes just because 
they get married? There was no promotion, no bigger salary but the same 
salaries, two people, and they got married. They pay $1,400 more a year 
in taxes. It hits the schoolteacher and the policeman the hardest.
  It is the people making that $25,000 to $35,000 who get hit the 
hardest. Yet that is the couple trying to save to buy a home for their 
family or to upgrade a home or to buy the second car or to go on a 
family vacation. This is money that should not be spent by the Federal 
Government; it is money that should be spent by the people who earn it. 
That is the question today.
  We are going to continue to debate the issue of the marriage penalty 
tax, and we will be testing people to see what their priorities are. 
Why would we continue to have this inequity in the Tax Code when we can 
fix it? We can fix it, and we are going to have the opportunity to do 
that the week people are beginning to pay their taxes. We are going to 
take this bill up the week of April 10, so that when people are filling 
out their tax forms, they can look at that standard deduction and say: 
My goodness, I am a married person and my standard deduction is $7,350 
and it should be $8,800. If the bill that will be before the Senate on 
April 10 is passed, it will be $8,800 next year, and this year will be 
the last year that a married couple has to pay more taxes because of 
the standard deduction inequity.
  I thank the Presiding Officer, and I thank the Senator from Georgia. 
I urge my colleagues to look at this issue. Let's focus on doing away 
with this inequity as soon as we possibly can.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. Mr. President, has all time expired?
  The PRESIDING OFFICER. All time has expired.
  Mr. COVERDELL. It is my understanding, then, that there are 30 
minutes now under the control of the Senator from Georgia.
  The PRESIDING OFFICER. The Senator is correct. The Senator from 
Georgia is recognized for up to 30 minutes.

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