[Congressional Record Volume 146, Number 46 (Wednesday, April 12, 2000)]
[Senate]
[Pages S2600-S2604]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE MARRIAGE PENALTY TAX

  Mr. BROWNBACK. Mr. President, I appreciate the leadership on both 
sides and their discussion on us moving forward and dealing with the 
marriage penalty tax. I am glad we are finally coming together, but I 
would note the Senator from South Dakota has put forward, on behalf of 
the Democrat side, 10 amendments on this issue. Many of these are not 
directly relevant to what we are trying to get done. With all due 
respect to him putting these forward, and I appreciate them working 
with us some, we have a pretty direct issue in front of us. It is the 
marriage tax penalty.
  To tie with it a discussion on prescription drugs, to tie with it 
discussions on Medicare, on Social Security priorities, on a college 
tuition tax credit, on conservation reserve programs, on the natural 
disaster assistance program, really just goes contrary, completely, to 
us ultimately trying to get this bill through.
  What we have before us is a marriage tax penalty. We have two 
alternatives put forward by the Democrat Party. That is good. I think 
we can have good, direct, clear votes on that, and then we can press 
forward.
  With all due respect to the Democratic leader, to call this a risky 
tax strategy, I think what is at risk if we do not deal with the 
marriage tax penalty is the institution of marriage in this country. 
What has happened is there is the fall-off in the number of people 
getting married, and then we tax them on top of that. That is risky.
  They have said a number of times that 52 percent does not deal with 
the marriage tax penalty. It is all directly applicable to the marriage 
tax penalty.

[[Page S2601]]

  The Democratic proposal actually enshrines in law a new homemaker 
penalty; that is, when one of the spouses decides to stay at home and 
take care of the children. The Democrat proposal makes families with 
one wage earner and one stay-at-home spouse pay higher taxes than a 
family with two wage earners earning the same income. Why discriminate 
against one-wage-earner families? That is a direct connection to the 
marriage tax penalty. That is a marriage tax penalty taking place with 
the one-wage-earner family.
  Why do we want a Tax Code that penalizes families because one spouse 
chooses to work hard at home and one chooses to work hard outside the 
home? I do not see why we would want to do that.
  There are a lot of things I like about the Democratic alternative, as 
far as doing away with the marriage tax penalty in a number of other 
places in the Tax Code. This notion of penalizing a single-wage-earner 
family is really not something we should be pressing.
  More to the point, it makes the entire issue of the marriage tax 
penalty, all 100 percent of the tax cut, relevant to marriage. They are 
saying 52 percent of it is not relevant to the family. It is directly 
relevant to that one-wage-earner family. In many of those cases, they 
are saying it is not.
  The other point, and I do not think it needs to be belabored: If we 
are ready to pass marriage tax penalty relief and both sides agree we 
need to pass marriage tax penalty relief, why would we take up a series 
of additional amendments on Medicaid, prescription drugs, Social 
Security, college tuition tax credit, Conservation Reserve Program, 
natural disaster assistance? Those are not relevant to the issue. We 
have a chance to do this particular issue, agree or disagree.
  If the Democrats think this is too rich, let's vote on their bill; 
let's have a vote on it. We have the chance now to do that, to hone in 
on that. I am fearful that what I am seeing is more a block to dealing 
with the marriage tax penalty.
  Mr. LOTT. Will the Senator yield?
  Mr. BROWNBACK. I will be delighted to yield.
  Mr. LOTT. Mr. President, I asked the Senator to yield because I very 
much agree with what he is saying and want to emphasize a couple 
points.
  There is a Democrat alternative. I indicated even yesterday we would 
be glad to take up debate and vote on it. I note even the Washington 
Post yesterday said the problem, for instance, with the Democratic bill 
is it is backloaded and would actually cost more over a 10-year period 
and more of it would affect the upper end, the more wealthy people. 
That is the alternative that was offered in the Finance Committee.
  I believe our bill is much more in line with what the average working 
American--a young couple and older couple, for that matter--would like 
to have. I appreciate the Senator's remarks.
  I want to say something else for the record. A complaint was made a 
few weeks ago by the Democratic leader about the cost of this bill and 
whom it will affect. I will, once again, read briefly what this bill 
will do.
  It will provide a $2,500 increase to the beginning and ending income 
level for the EIC phaseout for married filing jointly; in other words, 
a $2,500 increase for the earned-income tax credit joint or married 
couples. That is the low-end, entry-level couples who need help. There 
is a specific provision that will cost, over a 10-year period, about 
$14 billion.

  It also provides the standard deduction set at two times single for 
married filing jointly, and it doubles the brackets for the 15-percent 
and 28-percent. Then it provides for permanent extension of the 
alternative minimum tax treatment of refundable and nonrefundable 
personal credits.
  What is it in these provisions to which the Democrats object? It is 
aimed at low-end married couples. It is aimed at correcting a problem 
that was never intended, where people in the middle income are paying 
higher taxes because of the alternative minimum tax, and it is aimed at 
the lowest and the middle brackets. It makes good sense.
  Once again, what the Democrats are suggesting is a diversion. They 
want to get into agricultural policy. They want to get into Medicaid 
reform. They want to get into anything to distract from the issue at 
hand.
  We are perfectly willing to go ahead with relevant amendments on the 
marriage tax penalty. In the end, the question is: Are you for 
eliminating the marriage tax penalty or not? If you are, this is the 
opportunity. We will have a chance to see tomorrow who is really for it 
and against it.
  I thank the Senator for yielding, and I thank him for his leadership 
on this issue. It is an issue he has been talking about ever since he 
arrived in the Senate. Now we have a chance to get it done. We should 
not get off on side trails on issues that will complicate or maybe even 
defeat our entire effort. I thank the Senator. Keep up the good work.
  Mr. BROWNBACK. Mr. President, I thank the majority leader for his 
leadership and willingness to schedule this time. I am interested in 
dealing with this issue because we have been pressing it for years. We 
have been talking about it. Some have talked about it in campaigns.
  Why do we want to tie in 10 other topics? We should not. I hope the 
Democratic leader and our side can get together and agree on a set of 
alternatives that are relevant. Let's have a series of votes up or down 
so we can deal with this marriage tax penalty relief bill. It is time 
to do that. We have the wherewithal to do it. I hope we will deal with 
this now.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I actually want to proceed to morning 
business to introduce a bill, but having listened to the majority 
leader and having listened to Senator Daschle, I want to briefly 
respond to what I have heard on the floor of the Senate.
  This is the Senate, and I thank Senator Daschle for representing me 
as a Senator from Minnesota so I can represent the people in Minnesota.
  This proposal the Republicans have brought to the floor can easily be 
debated tomorrow. Senator Daschle made a proposal where there would be 
other amendments. They would be limited to an hour equally divided and 
up-or-down votes. It is a matter of whether or not my colleagues, the 
majority leader, and others, want to vote and want to be accountable 
for votes.
  As it turns out, in the Senate, we come to the floor and we try to 
represent the people in our States. We will have an opportunity to 
focus on the Republicans' proposal. The problem with their proposal is 
it blows the budget, and the hundreds of billions of dollars that go 
into their proposal disproportionately go to people at the top. It is 
money that can be invested in other areas.
  There are a number of Senators with amendments. Our amendments say 
some of that money, as my colleague from Montana mentioned, should be 
invested in kids and education; some of that money should be invested 
in making sure prescription drugs are affordable for senior citizens 
and others.
  In my particular case, the proposal I talked about--and I have worked 
with Senator Dorgan, Senator Snowe, and others on it--essentially says 
that when it comes to FDA-approved drugs in our country, there should 
be a way for our pharmacists and wholesalers to import those drugs back 
from other countries at half the cost and pass that savings on to 
consumers. That is called free trade. As a matter of fact, then people 
have less to deduct and there is less of a penalty.
  My point is, with all due respect--and I am just speaking for 
myself--for too long the majority leader has come out here and has 
basically said: I am not going to let other Senators come out here with 
amendments that deal with issues that are important to the lives of 
people they represent; I am going to insist on only the amendments I 
say you can do, and if you are not willing to do that, I will file 
cloture and that is it.
  That is not the way I remember the Senate operating for most of the 
years that I have been here. The thing that I have always loved about 
the Senate, the thing that I think has led to some really great 
Senators, is the ability for Senators to offer amendments, to speak out 
for the people they represent, to have up-or-down votes, and we would 
go at it.
  If it takes us a week, it takes us a week. If we start early in the 
morning, and we go late in the night, that is the

[[Page S2602]]

way we do it. We are legislators. We are out here advocating and 
speaking and fighting for people we represent.
  I thank Senator Daschle from South Dakota for essentially saying 
there is no way we are going to let the majority leader basically 
dictate to us what issues we should care about, what amendments we get 
to offer.
  We have a different view about good tax policy. We have a different 
view about how to get the benefits to families. We also have a 
different view about other priorities that we ought to be dealing with 
on the floor of the Senate as well.
  I will tell you, coming from a State where 65 percent of the elderly 
people have no prescription drug coverage whatsoever, I would like to 
see the Senate get serious on that issue. I would like to have an up-
or-down vote. I would like to thank the minority leader for protecting 
my rights.
  Finally, I ask the Chair, how much time do I have left?
  The PRESIDING OFFICER. The Senator has 3 minutes 58 seconds.
  (The remarks of Mr. Wellstone pertaining to the introduction of S. 
2414 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  Mr. WELLSTONE. I yield the floor.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. FEINSTEIN. I ask unanimous consent to be recognized to speak as 
in morning business for a period not to exceed 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator is recognized.
  Mrs. FEINSTEIN. Mr. President, I know there is a great deal of 
discussion going on about the marriage penalty tax. I wanted to stay 
out of the politics of it, if I could, and just speak about the merits 
of the proposals for a few moments.
  Essentially, what we have are three proposals: the Finance Committee 
proposal of $248 billion, over 10 years; the Moynihan proposal, which 
is the Democratic proposal, of $150 billion over 10 years; and then I 
believe a proposal that is really worthy of very serious consideration 
by this body, and one which I would support, which is a proposal by 
Senator Evan Bayh of Indiana for $90 billion over 10 years.
  I believe this proposal is the most sensible and most fiscally 
responsible way to go about addressing the issue. More than 21 million 
couples suffer from the marriage tax penalty. In my State, there are 
close to 3 million of them.
  I think providing marriage tax penalty relief is a measure of common 
sense and a measure of decency. The Tax Code not only can be used for 
revenue producing, but it is also used to encourage behavior that one 
believes one should encourage. Certainly getting married is a behavior 
that one wishes to encourage.
  Who generally believes that the marriage tax penalty is unfair? They 
are young couples. They are getting married. Both of them work. They 
find out, for the first time, they actually pay more taxes if they get 
married than they do if they remain single.
  These people are generally under the $100,000 earning limit. I have 
never heard anyone at the top brackets say they find the marriage tax 
penalty to be unfair. But I have heard considerable testimony from 
young couples getting married, young professionals: My goodness, we 
have to pay this penalty. Why is it? How is it fair?
  Senator Bayh's proposal strikes right at that heart, and it does so 
in a way that you can say and I can say--every one of us in this body 
can say--we eliminate the marriage tax penalty for those earning under 
$120,000 all across this land within 4 years. I think it is simple. I 
think it is direct. It is cost effective. And it gets the job done. I 
think it makes a great deal of sense.
  The targeted Marriage Tax Penalty Relief Act provides significant 
relief by creating a dollar-for-dollar tax credit, calculated by the 
taxpayer, using a simple worksheet, which offsets and eliminates the 
marriage penalty for families making under $120,000. The credit is 
phased out at $140,000.
  The bill would also broaden the availability of the earned-income tax 
credit for low-income working families.
  Under this legislation, half of all taxpayers with marriage penalties 
will have their penalties eliminated the first year. By 2004, it 
completely eliminates the penalty on earned income for all couples 
making under $120,000. That is approximately 17.5 million couples.
  If you look at the fact that the impact of the majority proposal by 
the Finance Committee eliminates most of the marriage tax penalty on 
21.6 million couples who currently face penalties by year 10, and 
provides a bonus--this does not provide a bonus; the phaseout in that 
bill is over 10 years--the phase in the Bayh bill is over 4 years. In 
the Moynihan bill, 21.6 million couples who currently incur a marriage 
tax penalty would find relief by year 10.
  The beauty of this bill is that all of the marriage tax penalty is 
eliminated for 17.5 million people by year 4. And less than 10 percent 
of all households earn more than $120,000 a year. So, effectively, it 
covers not only 17.5 million people, but it covers over 90 percent of 
the population who would be affected. It does it at a cost that is much 
lower than the other two bills--$90 billion.
  What I like about it is it gives us the opportunity to actually see 
tax reduction happen, to actually say that within 4 years the marriage 
penalty tax is completely eliminated for working families earning under 
$120,000 a year. We do it for a modest amount of $90 billion over 10 
years.
  The other bills deal with all kinds of different so-called hidden 
penalties, but those are not the real things that I think impact the 
people's drive to eliminate the marriage penalty. It is what happens 
when you get married. It is the increase in the tax when you get 
married. This is entirely eliminated within a 4-year period of time. I 
support Senator Bayh's proposal, and I will be pleased, when he offers 
it, to be a cosponsor of it. I hope it will have very serious debate 
and discussion before this body.

  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I thank my good friend from California for 
her statement.
  This will come out later when we debate this more. I think it is 
important to note that the proposal advocated by my good friend from 
California has a certain deficiency, which is that it does not at all 
address the marriage tax penalty caused by unearned income. The 
proposal advocated by my friend from California deals only with the 
marriage tax penalty caused by earned income; that is, by wages and 
salaries. There are a lot of senior citizens in our country, as we 
know. Most of their income is unearned income. It is pension benefits, 
Social Security income. It is not wages or salary. As a consequence, 
there is about a $60 billion tax penalty over 10 years for senior 
citizens that is not addressed in the proposal offered by or mentioned 
by and advocated by the Senator from California but which is covered by 
the proposal offered by the Senator from New York, the Democratic 
proposal.
  I will address another situation. There are lots of aspects of the 
marriage tax penalty provision. Again, there is nothing in the code 
that imposes a penalty on marriage. It is just that because of our 
combination of progressive rates, a desire to achieve neutrality 
between married taxpayers and individual taxpayers with the same 
income, a desire to achieve equality between married couples with the 
same income but with different distribution in earnings, we end up with 
this problem. There is no total fix. It is just a matter of trying to 
figure out what makes the most sense.
  This chart deals with only one aspect of the so-called marriage tax 
penalty. That is the example of the marriage tax penalty in the earned-
income tax credit, the EITC, a provision in the law which is to help 
low-income people who otherwise face a significant tax burden, let 
alone all the other difficulties they are facing in life with low 
income. This chart shows first a single mother with two children. Let's 
say her income is $12,000 a year, which is very common. She, today, 
would receive an earned-income tax credit benefit of $3,888.

  Let's take a single father with no children. Let's say his income is 
the same; it is $12,000. Obviously, he receives a zero earned-income 
tax credit. Let's say the single mom with two children marries the 
individual with no children. Now they are married with two children. 
Their total income will

[[Page S2603]]

be $24,000, hers $12,000 and his $12,000. But because of the marriage 
tax penalty, because of the way the Tax Code works, and in particular 
the EITC provisions which are very complex, as a consequence of the man 
and the woman getting married, their now joint earned-income tax credit 
will no longer be the $3,888, which the woman alone with her two 
children would receive. Rather, now that they are married, the combined 
EITC benefit would be lower, in the neighborhood of $1,506, a clear 
penalty for getting married. It is something we want to fix.
  It has been stated several times that the proposal, the Finance 
Committee proposal helps low-income people by addressing the marriage 
tax penalty under the EITC. It does, but not very much. The maximum 
amount of relief that can be received under the Finance Committee bill 
in addressing a potential $2,382 penalty is $500. That is the maximum 
amount of benefit under the marriage tax penalty that is addressed in 
the Finance Committee bill.
  Contrast that with the Democratic alternative. Under the Democratic 
alternative, there would be total relief; that is, a single mom with 
two children and a single father with no children, when they get 
married, would receive no penalty. Why is that? Because of the 
simplicity of the Democratic alternative. The simplicity is, if you are 
married, you just choose. You file jointly or you file separately. You 
choose the one which results in lower tax. As a consequence, all of the 
65 provisions in the Tax Code which sometimes cause a marriage penalty 
are addressed. They are all solved.
  The minority bill solves completely the marriage tax penalty problems 
facing some Americans. Contrast that with the Finance Committee bill, 
which does not solve completely the marriage tax penalty problems 
facing some married taxpayers because the Finance Committee bill deals 
with only three of the inequities, not all 65.
  This is just one of the inequities the Finance Committee bill does 
not address very much. There is kind of a little tack-on provision 
which addresses it. But as a consequence, the Democratic alternative 
completely solves the EITC problem.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. SMITH of New Hampshire. Mr. President, we did spend some time 
today debating the elimination of the marriage penalty tax. This is 
something I have been working on for all the years I have been in 
Congress in the Senate. I look forward to the day we can repeal it. I 
was hoping we would have this vote in the near future. I very much 
regret the delay that was imposed upon us by the minority because by 
putting nongermane amendments on this, we slow down what we could 
accomplish here in the very near future, which is finally to eliminate 
the marriage tax penalty.
  I have an amendment prepared to implement elimination of the marriage 
tax penalty a lot sooner. I am contemplating offering that. I will see 
how much support there is for it. Before I do that, however, instead of 
the proposed phase-in period of 6 years, which is the underlying 
proposal, my amendment would eliminate the marriage penalty tax 
immediately, bringing working parents tax relief right away.
  According to the Congressional Research Service, as this graph shows, 
the additional savings my plan would bring married couples over the 
Roth plan would be almost $3,000. If you look at the years, we go from 
$69 versus $879 in 2002, all the way over to 2008, where it evens out. 
The point is, these are savings for a married couple--about $810 in the 
first year, 2002--if we put it into effect immediately.
  With today's cost of living exploding, education, tuition, high 
prices at the pump, that is a substantial savings for an ordinary 
working family. I think we ought to make this effective today, as soon 
as it passes, and not implement it over a 6- or 7-year period. Married 
couples have been waiting for a large number of years, since this 
ridiculous provision was put in the IRS Code.
  It is not often we have the opportunity to right a wrong around this 
place, but this is an opportunity. I sincerely hope we take advantage 
of it.
  Today, however, not only do we have the opportunity to turn back a 
tax, we also have an opportunity to turn back an unjust tax that 
punishes an institution that is the very backbone of society, at least 
in most of our minds.
  You hear some people say that it isn't. But marriage is the backbone 
of our society, the essence of our families. One of the reasons why we 
are having a lot of cultural problems today is a lack of emphasis on 
the family and marriage. Twenty-five million couples are subject to the 
marriage tax penalty in America and, frankly, those of us who have not 
had the courage to overturn that tax over the past several years 
deserve some of the blame because it punishes married people. In New 
Hampshire alone, almost 140,000 couples will be hit with a marriage tax 
penalty. In a small State such as New Hampshire, which only has a 
little over a million people, this tax is antimarriage, antifamily, and 
antichild. Children reared in two-parent homes are more likely to 
succeed in school, stay away from drugs, and not become involved in 
crime. We should not penalize married couples. It doesn't make sense.
  A way for couples to avoid the marriage tax penalty is they could 
file for divorce and save money or they could not get married and save 
money and just live together. That kind of tax policy doesn't make 
sense. The average marriage penalty is $1,400, or more, in additional 
Federal income taxes, which is more than $100 a month. That is an extra 
$1,400 that could be used to buy school clothes for kids, pay for a 
home computer, perhaps, or a little health insurance, or maybe take a 
family vacation. The point is, you would have control over an 
additional $1,400 to do with what you want, and not have the Government 
taking your money whenever it wants.
  I have received a lot of mail on this issue over the years asking for 
relief--I might say, begging for relief, for the Congress to do 
something. Just one example. A gentleman by the name of Roy Riegle from 
Derry, NH, wrote this:

       I am a software engineer working in Merrimack and living in 
     Derry. Via the Web, I just learned of the House Passage of 
     the ``Marriage Tax Cut'' bill. (I think it is H.R. 6). I want 
     to heartily encourage you to vote for this bill when it 
     reaches the Senate. We are one of the classic middle class 
     families (I'm an engineer and my wife teaches in Chester) who 
     are trying to pay for our kid's college education. Our cost 
     to send our second daughter to Trinity College in Hartford, 
     Connecticut, next year is expected to be $20,000. We need 
     assistance of some sort, and this will help. Thank you for 
     your consideration.
                                                     Roy Riegle.  

  That is so true of many families trying to meet expenses and pay 
education costs. For all these millionaires and billionaires you read 
about and hear about all over the country making all this money, maybe 
$100 a month isn't important. But it is real important to people such 
as the Riegles and so many others who have written me on this issue 
over the years.
  Since 1970, the number of dual-income couples has risen dramatically 
and continues to rise. It is these families who will benefit from the 
repeal of this tax. What an outrageous tax this is, to discriminate 
against people who are married. It is just un-American, and how it ever 
got in the code is beyond me. Why it hasn't gotten out in all these 
years is beyond me.
  I think we should understand that the reason why, as we stand here 
now, we have not been able to pass this on the floor of the Senate 
today is because of delays, because the other side wants to offer 
nongermane amendments to slow it down, to say we have to pick and 
choose which family gets a break. You have to be in a certain income 
tax bracket, or you have to be a certain type of person to get a break, 
and all this nonsense. Everybody should get the break. The marriage tax 
penalty itself is unfair. It is not more or less fair for one family or 
another, depending on the income. It is an unfair tax. Let's get rid of 
it, period. There is nothing complicated about that. This year, 
Americans will give 39 percent of their income to the Federal 
Government. As tax levels rise, women who might otherwise stay at home 
are forced to enter the job market. The percentage of single-worker 
households in the U.S. has plunged to 28.2 percent, compared with 51 
percent in 1969. However, the harder parents work to keep pace, the 
greater their chances of moving into a higher tax bracket and winding 
up giving more to the Government.
  Mr. President, in conclusion, these families are right. These taxes 
do penalize. If we are going to penalize the

[[Page S2604]]

sacred institution of marriage and offend our sense of decency and 
morality, if that is what is going on in the Tax Code, we need to 
correct it.
  We should be encouraging the makeup of the family, not the breakup of 
the family. We should bring tax relief to married couples today--not 
tomorrow, not next year, not 6 years down the road, but today. They 
have waited all these years with this discriminatory tax. We can never 
make it up to them, so let's start today and make it effective today. 
We can bring tax relief to these couples by passing my amendment and, 
if not mine, at least we should get started with the underlying bill. 
It is better to do it down the road, over the course of 6 years, than 
not at all. With my amendment, we can do it immediately and save all of 
this money each year for each of these families.
  (Mr. ALLARD assumed the Chair.)

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