[Congressional Record Volume 146, Number 44 (Monday, April 10, 2000)]
[Senate]
[Pages S2455-S2456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MARRIAGE TAX PENALTY

  Mr. DORGAN. There is no disagreement in the Senate about the marriage 
tax penalty, that it ought not exist. We should change it. There are 
several different proposals to change it. We ought to come together 
with respect to one of those proposals.
  I will describe one approach to address the marriage tax penalty. I 
am going to be introducing a piece of legislation at some point in the 
days ahead with my colleagues, Senator Judd Gregg, a Republican, and 
Senator Dick Durbin, a Democrat, and perhaps others, that would 
dramatically change the income tax system in this country. This 
approach would eliminate for a large number of Americans the marriage 
tax penalty. I have been working on this a couple of years and 
appreciate the work of Senator Gregg and others.
  Over 30 countries that have an income tax system allow people to 
comply with their income tax without having to file a tax return. How 
do they do it? They just manipulate their W-4 that is filed with the 
employer to provide a little more information, and their actual 
withholding becomes their exact tax liability--no questions. That is 
your liability, no return filed, no searching for records, no long line 
at the post office on April 15.
  Our country can do that. Our country can do it in a way that will 
allow 70 million Americans to comply with their income tax 
responsibilities on April 15 without having to file an income tax 
return. How do we do it? You

[[Page S2456]]

take the W-4 form when you sign in with your employer and you say: I 
have four children. I own a home--check that box. Check about three or 
four boxes. From that, you provide opportunities for the deduction for, 
on average, a mortgage interest deduction, and a couple of other 
things. A table is then provided by the Internal Revenue Service that 
sets forth the exact amount of taxes that the employer will withhold 
and send the IRS, and that is the end of the transaction. You are not 
going to be hassled or forced to search for receipts; you are not going 
to wait in a long line at the post office to get your income tax return 
postmarked by April 15.

  Now, in doing that, this plan will also eliminate the marriage tax 
penalty. But the plan only applies to people making $50,000 a year or 
less in wages, if they are single, or $100,000 a year or less, if they 
are married filing jointly. If they have less than $2,500 in other 
income such as interest, dividends or capital gains if they are single, 
or $5,000 or less in such other income if they are married and filed 
jointly, they are eligible to check the box that says, yes, I want to 
use the Fair and Simple Shortcut Tax plan, the FASST plan, which means 
I don't have to file a tax return. My withholding will be adjusted at 
my place of work, and the withholding will be sent to the IRS and there 
is no tax return.
  Simple, yes. It is the only plan I know of that discusses simplicity. 
Everybody who talks about simplifying the tax program, in most cases, 
ends up proposing things that will make it horribly complicated. This 
will simplify it--but not for everybody.
  Some people have unusual income characteristics, with four different 
jobs, and investments, and capital gains of $20,000 or $40,000 a year. 
It won't work for them. For the majority of the American people whose 
only income is their wage at work and they have a de minimis amount of 
other income in capital gains or interest--$5,000 a year if they are 
married and filing jointly--all that other income will be tax free. So 
that is the incentive for savings and investment; that is the right 
incentive. All of the wage income--after several major deductions--up 
to $50,000 single and $100,000 married filing jointly--will be taxed at 
the single lowest rate. This plan extends the bottom rate and provides 
a de minimis amount of income tax free and you don't have to file a tax 
return anymore.
  That makes a lot of sense to me and a fellow named Bill Gale at the 
Brookings Institution, who has done a lot of work on this issue of 
return-free filing. We are going to introduce legislation, which has 
been underway for a year and a half, I hope within the next week. As I 
indicated, Senator Judd Gregg of New Hampshire has agreed to cosponsor, 
and Senator Durbin and, I hope, others, so we can begin discussing real 
simplification for tens of millions of Americans who always do the 
right thing. They always file a tax return, they always fill it out 
correctly, and they believe as an American it is their responsibility 
because we do things, as a country, to provide for a common defense, to 
build roads and schools, and to provide for a whole series of things. 
They understand their obligation to pay for the cost of a civilized 
society, to pay for the cost of democracy. But they ought to be able to 
do it in a way that is far simpler than the current system, and that is 
what we intend to accomplish with this legislation.
  Madam President, I yield the floor.
  The PRESIDING OFFICER (Ms. Collins). Under the previous order, the 
Senator from Alaska is recognized.

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