[Congressional Record Volume 146, Number 46 (Wednesday, April 12, 2000)]
[Senate]
[Pages S2566-S2568]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE MARRIAGE TAX PENALTY

  Mr. GRAMM. Mr. President, yesterday, as I listened to our Democrat 
colleagues talking about the marriage penalty elimination, and their 
opposition to our bill, I got interested in this debate and eager to 
speak on it.
  I know we have not been able to work out an agreement yet to bring 
the bill to the floor. I know our Democrat colleagues have refused to 
agree to limiting it to amendments relevant to the marriage penalty. We 
all know the easiest way to kill something around here is to pile a 
bunch of extraneous amendments on it.
  I am hopeful we can work out these differences and that we can have a 
vote on eliminating the marriage penalty. The American people have a 
right to know where Members of the Senate stand on this critically 
important issue.
  The repeal of the marriage penalty was adopted in the House by an 
overwhelming vote. I believe it should be repealed. I am hopeful the 
President will sign the bill, even though to this point in time he says 
he will not. But rather than waiting around for some agreement to be 
made--that may never be made--I felt I had something to say that ought 
to be heard on this issue.
  What I would like to talk about today is, first, to set this debate 
within the context of the President's budget and basically highlight 
the choice we are making between spending here in Washington, where we 
sit around these conference tables and make decisions to spend billions 
of dollars, and spending back home in the family, where the families 
sit around the kitchen table and try to decide how to spend hundreds of 
dollars or thousands of dollars for themselves.
  I would like to talk about our repeal of the marriage penalty and why 
it is the right thing to do, why it is not just a tax issue, why it is 
a moral issue. This is a moral issue we are talking about.
  I want to talk about the so-called marriage bonus that some of our 
colleagues have thrown up. I want to try to point out how it is one of 
the more phony issues that has ever been discussed.
  I want to talk about President Clinton's alternative to our repeal of 
the marriage penalty.
  Finally, I want to talk about the last form of bigotry that is still 
acceptable in America; that is, bigotry against the successful.
  I would like to try to do all that in such a way as to deviate from 
my background as a schoolteacher and be brief.
  First of all, let's outline the choices we have. The President has 
proposed in his budget that we spend $388 billion over the next 5 years 
on new Government programs and expansions of programs.

  This is brand new spending. This is $388 billion the President's 
budget says we ought to spend above the level we are currently 
spending, and we ought to do it on a series of new programs and program 
expansions--about 80 new programs and program expansions.
  We have proposed that we give the people of America $150 billion of 
the taxes they have paid above the level we need to fund the Federal 
Government, and at the same time to save every penny of money that came 
from Social Security taxes for Social Security.
  Many people who have followed this debate heard our Democrat 
colleagues spend all of yesterday saying, it is dangerous, it is 
irresponsible, it is reckless to let the American people keep $150 
billion of this non-Social Security surplus we have in the budget 
because the American economy is generating more revenues than we need 
to pay for the current Government.
  The question I would ask, and that I would ask Americans as they are 
sitting in front of their television screens or as they are sitting 
around the kitchen table doing their budget, is: How come it is 
irresponsible for us to let working families spend $150 billion more of 
their own money, but it is not irresponsible to let President Clinton 
and Vice President Gore and the Democrats spend $388 billion of their 
money? How come it is irresponsible when families get a chance to keep 
more of what they earn, and yet it is not irresponsible to take more 
than twice that amount of money and spend it in Washington, DC?
  Why repeal the marriage penalty? Gosh, most people are shocked when 
they discover that we have such a thing. Let me quickly point out, I do 
not think anybody ever set out with a goal of imposing a penalty on 
marriage.
  When many of the provisions of the Tax Code were adopted, only 30 
percent of adult women worked outside the home; now it is roughly 60 
percent. The world has changed dramatically since much of the Tax Code 
was written.
  As Abraham Lincoln recognized long ago: To expect people to live 
under old and outmoded laws is like expecting a man to be able to wear 
the same clothes he wore as a boy. It just does not work.
  No matter who set out to do it, we have in today's Tax Code a 
provision of law that basically produces a situation where, if two 
people, both of whom work outside the home, meet and fall in love and 
get married, they end up paying on average about $1,400 a year in 
additional income taxes. Paradoxically, that is true if they meet, fall 
in love, and decide to get married on the last day of December. They 
pay $1,400 more of income taxes for the right to live in holy matrimony 
for one day. The number gets much bigger for working couples who make 
substantial income, and it gets bigger for working couples who make 
very moderate income.
  Today, if a janitor and a waitress--the janitor has three children; 
the waitress has four children; they are both working; they are 
struggling, trying to do the toughest job in the world, which is to 
make a single-parent home functional--meet and fall in love and have 
the opportunity to solve one of their great problems, by their getting 
married, they not only both lose their earned-income tax credit but 
they end up in the 28-percent tax bracket. We literally have a 
disincentive in the Tax Code for people to form the most powerful 
institution for human happiness and progress in history; that is, the 
family.
  This obviously makes no sense. Nobody argues that it makes sense. 
Even the people who oppose repealing it agree that the Tax Code does 
not make any sense. They simply want to spend the money that would be 
given back, and so they don't want to give it back. They don't say it 
makes sense. They don't say it is fair.
  I think it is not only unfair, it is immoral. How dare we have a Tax 
Code that penalizes people for getting married? So we want to repeal 
it.
  Where does the penalty come from? I know people's eyes glaze over 
when we talk about numbers. I will not talk about many of them today, 
but let me try to explain why it happens.
  If you are single and filing your tax return, you pay at the 15-
percent rate on income up until you earn $25,750. Let's say you and 
your sweetheart both get out of school and begin teaching, and you both 
make $25,000 a year, and you are both paying 15-percent marginal tax 
rates. If you get married, then, at a combined income of $43,000, 
roughly, you go into the 28-percent tax bracket.
  So the first reason for the marriage penalty is that in the case of 
these two young people who fell in love, got married, were making 
$25,000 each, they were paying 15-percent marginal tax rates each, and 
they got married, $7,000 of their joint income is taxed at 28 percent.
  Secondly, the standard deduction is such that you end up losing and 
getting

[[Page S2567]]

a smaller standard deduction by getting married than if you stayed 
single.
  The net result is, the standard deduction for a married couple is 
less than the sum of the two deductions for two individuals who are 
single. You get into the 15-percent tax bracket at a lower income. You 
get into the 28-percent tax bracket at a lower income.
  The bottom line is, when you take into account that rather than 
getting $8,600 in a combined standard deduction, you only get $7,200, 
and when you take into account that you get into the 28-percent tax 
bracket $7,000 sooner, the net result is, on average, for those 
Americans who fall in love and get married, they pay on average $1,400 
a year for the privilege of being married.
  We get rid of the marriage penalty for everyone. How do we do it? 
First of all, we say, whether you are single or whether you are 
married, you get the same standard deduction. If it is you and your 
wife filing a joint return, you get twice what you would have gotten 
filing individually, or you get the combination of what she would have 
gotten and what you would have gotten. We then stretch the 15-percent 
tax bracket to assure that by getting married, married couples do not 
get pushed into a higher tax bracket. Then we stretch the 28-percent 
tax bracket to be sure that by getting married, people don't get pushed 
into the 31-percent tax bracket.
  The net result of our bill is, we totally repeal the 
marriage penalty. As a result, the average taxpaying family in America 
would get about $1,400 more that they could spend themselves on their 
own families.

  I know every time we talk about appropriations here, spending money 
in Washington, people talk about compassion: We are spending money on 
education, housing, nutrition, those things we are all for. By 
repealing the marriage penalty and letting families keep $1,400 of 
their own money to spend on their own children, they are going to spend 
it on education, housing, and nutrition--the education they choose, the 
housing they choose, and the nutrition they choose. That is what we 
want to do.
  The alternative is proposed by President Clinton. I want people to 
know that when the President stands up and says, I am for repealing the 
marriage penalty just as the Republicans are, only I want to do it 
differently, he is not quite leveling with you. You need to know that.
  How can I possibly say such a thing? First of all, when you look at 
the fine print of the President's tax cut, the first year, he raises 
taxes by $10 billion; the second year, he raises taxes by $1 billion. 
At the end of 5 years, which will be in the second term of the next 
President--or it could be two Presidents from now--finally, the Clinton 
plan will grant a grand total of a $5 billion tax cut. When the 
President is saying he gets rid of the marriage penalty, he is not 
leveling with you.
  Let us talk about who is excluded. I am sure people know the code. If 
they don't know the code, I want them to know it. Whenever President 
Clinton and Vice President Gore and the Democrats want to deny people 
the ability to keep money they earn, or whenever they want to raise 
their taxes, there is one label they always stick on them--they are 
``rich.'' Every time taxes are raised, if you listen to President 
Clinton and Vice President Gore, we raised taxes on ``the rich.''
  Go back and look at the President's tax increase he proposed in 1993. 
It turned out that if you were earning $25,000 a year and were drawing 
Social Security, you were rich. That is how they define rich. Then they 
had tax increases on families making $44,000 a year. Ask yourself, how 
did they get rich?
  Well, when you looked at the way President Clinton and Vice President 
Gore proposed their tax increase, to calculate who had to pay it, they 
added what you would have to pay in rent to rent your home if you owned 
your home, they calculated what your retirement had grown by, they 
calculated the value of your health insurance, they calculated the 
value of your parking place. Some family in Texas making $44,000 a 
year, thinking they were a long way from being rich, suddenly, with all 
of President Clinton's amazing ability to twist the facts, they were 
making $75,000 a year, if they owned their own home, owned their own 
car, had a parking place at work, if they owned life insurance.
  But the point was that supposedly they were rich. Now, I am sure if 
you followed this debate, you have heard our Democrat colleagues say 
that the Republican bill gives relief from the marriage penalty to 
people who are rich. Well, who are they talking about?
  Well, under the President's bill, he raises the standard deduction, 
though not enough to eliminate the marriage penalty coming from it, and 
he does nothing to eliminate the fact that young people, or people who 
are married, get into the 28-percent tax bracket $7,000 earlier. So 
when we stretch the 15-percent tax bracket, who are we helping that the 
President says is rich? It seems to me that is a reasonable question. 
Who are these rich people we are helping that the President's bill 
would not give the tax relief to by stretching the 15-percent tax 
bracket?
  Well, the people we are helping, as it turns out, are people who make 
$21,525 each. So that if you have a fireman and you have a dental 
technician and they meet and fall in love, under the President's notion 
of rich, you are rich. And to quote one of our Democrat colleagues: 
``You don't deserve to have this penalty eliminated because you don't 
need it; you are rich.'' Under their bill, two people who get married 
and who each make $21,525 would be denied the relief we grant by 
stretching the 15-percent tax bracket.
  Now, ultimately, I ask people, if you are making $21,525, are you 
rich? You may not think you are, but realize that when President 
Clinton and Vice President Gore and the Democrats are talking about 
rich people, they are not talking about Rockefeller, they are not 
talking about Mellon, and they are not talking about all of these new 
rich people who came from the information age; they are talking about 
you if you make over $21,525.
  Under the President's proposal, he gives no marriage penalty relief 
if one parent stays at home. So under the President's plan, if you 
sacrifice and give up things in order that one parent can stay at home, 
you are rich. Under the President's proposal, you don't deserve any 
relief under eliminating the marriage penalty. Let me quickly add, I 
don't want to get into a judgment--and I am not going to--on whether 
one parent should stay at home. My mama worked my whole life because 
she had to. My wife has worked the whole lives of our children because 
she had a career and she wanted to. I think people have to make the 
decision for themselves. This is the point. You are not rich because 
you make a decision that one of you should stay home and take care of 
your children.
  The President says that if you itemize your deductions--and about 
half of all families who make $30,000 or more itemize deductions, and 
everybody does that owns a home--you are rich and therefore you don't 
get marriage penalty relief. The President's plan would grant marriage 
penalty relief at a maximum of $43.50 the first year.
  This is my point. Does anybody really believe that somebody making 
$21,525 is rich? Does anybody believe that every family in America 
where one of the parents stays at home with their children is rich? 
Does anybody believe that every family who owns a home is rich? Does 
anybody believe that anybody who makes $30,000 a year and itemizes on 
their taxes is rich? I submit that nobody believes that. But why does 
the President say it? Why does the Vice President say it? Why do our 
Democrat colleagues say it?
  Let me tell you the only thing I can figure out. The alternative to 
saying that you are against repealing the marriage penalty, because it 
goes to the rich, is to say you are against it because you want to 
spend it in Washington. I think what the President, the Vice President, 
and their supporters have concluded is that it is not viable to stand 
up on the floor of the Senate, or in front of a television camera 
anywhere, and say it probably is unfair that you are paying $1,400 for 
the right to be married; but, look, we can spend the money in 
Washington better than you can, and it is better to let us keep it 
because we will spend it and we will make you better off. I don't think 
anybody would believe that and so, as a result, we see an effort to 
confuse people by saying, well, look, we just don't want to give this 
to the rich. But who gets tax relief to eliminate the marriage penalty 
under our bill and ends

[[Page S2568]]

up not getting the full relief under the President's bill? People 
making $21,525 each, people who choose to have one parent stay at home, 
people who own their home or itemize deductions.

  So the plain truth is, those are the people who are being called 
rich. I don't think that is an accurate portrayal of rich. But, look, 
what is wrong with being rich? I will address that in a moment. You 
have heard, and you will hear again as this debate progresses, about a 
marriage bonus. Let me not mince words. If there has ever been a 
fraudulent idea in any debate in American history, it is the marriage 
bonus. Clearly, some minion at IRS was ordered by a politician to give 
a justification for continuing the marriage penalty, and after great 
exertion and twisting of logic, they came up with the concept of a 
marriage bonus--that there are actually people getting a bonus from 
being married--an average of about $1,300, I think it is, for these 
people who supposedly get the bonus.
  What is this bonus? The bonus is the following thing. I have two 
sons; one is 24 and one is 26. They have been on my payroll for those 
corresponding numbers of years. I, as many parents, look forward to 
them being off my payroll. If a wonderful, successful girl came along 
and married one of them, she would get a marriage bonus. She would get 
to take a standard deduction by having them on her payroll instead of 
my payroll. She would be able to file jointly with them and stay in the 
15-percent tax bracket, up to $43,000 a year. She would end up getting, 
on average, about an $1,300 benefit by marrying one of my sons. I would 
lose the benefit, but would I complain? Would this be a great economic 
deal for her? I mean, let's get serious. Can you feed, clothe, house, 
educate, and entertain somebody for $1,300 a year, or $1,400 a year, or 
$4,000 a year?
  We insult the intelligence of the American people by talking about a 
marriage bonus as if the piddling amount of deduction that people get 
when they marry someone who doesn't work outside the home as if somehow 
that is a bonus to them, when it is a tiny fraction of what it costs, 
basically, to care for someone in America.
  Let me say I would be willing to supplement the marriage bonus that 
someone would get by taking one of my sons off my payroll. Maybe for 
love someday it will happen. I hope so. But for economic reasons, 
nobody is going to marry somebody to get their standard deduction 
because they cannot feed them, house them, clothe them, and all the 
other things they need for them.
  Let's not insult the intelligence of the American people by sighing: 
Oh, yes, it is true that the average family with two members who work 
outside the home pay $1,400 of additional taxes for the right to be 
married, but there are these people who get a bonus. The bonus is a 
fraud. The tax penalty is very real.
  I want to turn to the final question. It is one about which I have 
thought a lot and about which I feel very strongly. That is all this 
business about, every time we debate anything related to the Tax Code, 
we are always talking about rich people.
  For some reason, the President and the Vice President and many 
members of their party believe you have to constantly divide Americans 
based on their income. I strongly object to it because I think it is 
very destructive of everything this country stands for.
  There are a lot of things I have always admired about my mama. But 
the one thing I think I admire the most is, when I was a boy and we 
were riding around in a car, we would ride down the nicest street in 
town, and my mama would almost always say, ``If you work hard and you 
make good grades, someday you can live in a house like that.''
  By the logic of the President and the Vice President and many members 
of their party, my mother should have been saying: Those are rich 
people. They probably stole this money from us. It is outrageous that 
they have this money. They don't deserve this money. We ought to take 
some of this money away from them.
  If we had some landed aristocracy, or something, maybe you could make 
that argument. But the people who were living in those nice houses when 
I was growing up as a boy didn't get there by accident. Most of the 
people didn't inherit that money, most of them earned it. Why should 
they be singled out?
  Under their logic, my wife's father would have been a rich person to 
be singled out. Both his parents were immigrants. Neither of them had 
any formal education. He won $25 for an essay contest when he was a 
senior on ``What I can do to make America a greater country.'' His 
essay was, the only part of America he could control was himself; the 
only way he could make it a greater country was making something out of 
himself.
  He won $25 in 1932 for writing that essay. And he decided he was 
coming to the mainland from Hawaii and was going to become an engineer.
  He took a freighter from Hawaii, got on a train, met a boy going to 
an engineering school, went there, went out looking for a job, went to 
a restaurant, and the guy at the restaurant said: You are in luck. 
There is a guy coming here with a machine that says it will wash 
dishes. If you can outwash the machine, you have the job. Joe Lee 
outwashed the machine.
  He went on, and 3 years later he had a degree in electrical 
engineering.
  He became the first Asian American ever to be an officer of a sugar 
company in the history of Hawaii.
  Is he the kind of person we ought to hold up and say, He is rich?
  He was president of the Rotary Club. He was president of the Little 
League. He was the head lay leader of his church.
  Is that something in America where we single people out and say they 
are rich? I don't think so.
  There is only one form of bigotry that is still acceptable in 
America, and that is bigotry against the successful. It is bigotry 
against the people who, through their own exertions, succeed.
  I would just like to say, obviously, it is a free country. If the 
President and the Vice President and people in their party who 
constantly engage in this class warfare want to do it, they have a 
right to do it. But I don't think it is right. And I think they are 
stretching the truth to the breaking point when they claim that in 
repealing the marriage penalty, as we do that, we are helping rich 
people when in fact the President's proposal to ``eliminate the 
marriage penalty'' denies marriage penalty relief to people who earn 
$21,525 a year.
  Where I am from, that is not rich. But there is nothing wrong with 
being rich.
  Look, if we are against the marriage penalty, aren't we against it if 
a young lawyer and a young accountant meet and fall in love? Why should 
it exist for some people and not for others? Should marriage penalties 
be paid by people who have high incomes and not by those with low 
income?
  Our position is very simple. The marriage penalty is wrong. It is 
immoral. It should be repealed, and we are going to repeal it.
  I hope the President will sign this bill. If he doesn't, we are going 
to have an election. If people want it repealed, they will know how to 
vote.
  I thank my colleagues for their indulgence, having listened to 
speeches all yesterday about the rich and how we were trying to help 
them by repealing the marriage penalty. Let me simply say I thought 
some response was needed. Let me also say I don't have any objection to 
people being rich. I wish we had more rich people. When our programs 
are in effect, we will have more rich people because they will have 
more opportunity. They won't be paying the death tax, and they won't be 
paying the marriage penalty.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.

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