PULLING THE PLUG ON THE "I DO" TAX
What if I told you we discouraged something that could reduce instances of poverty and child abuse; lessen the likelihood for children to be depressed or have developmental problems; dramatically cut adolescent drug use; and decrease instances of domestic violence?
Unfortunately that's exactly what happens in our country every day. The benefits of marriage are well established, and research shows us that the host of societal ills mentioned above, are far less likely to occur in a married household. Yet our country's tax code penalizes couples for saying "I do," placing an added tax burden on those who choose to marry.
Americans should not have to choose between love and money. Yet poorly conceived tax laws force them to do just that. Fortunately, in 2001, Congress took a step in the right direction, passing sweeping tax relief, including lowering the marriage penalty, for all Americans at just the right time. No one could have foreseen the economic turndown that followed the terror attacks on our nation, and the tax relief helped create jobs and grow the economy.
Congress eliminated the death tax, lessened the marriage penalty, increased retirement savings limits and boldly reduced the tax burden for every taxpayer. Unfortunately, because of procedural rules in the Senate this tax relief will "sunset" after 10 years. In 2011, all of that relief will vanish. One of my highest priorities in 2003 is to accelerate this tax relief and make it permanent. The American people deserve to have consistency in the tax code so they can adequately plan and prepare for their retirement and for their family's future.
That's why in January I introduced a bipartisan bill in the Senate to provide immediate and permanent tax relief from the marriage penalty, effectively ending this inequity for most couples.
The bill is simple, straightforward and effective. It would immediately increase the standard deduction for married couples filing a joint return so it is twice that of the basic standard deduction for single individuals. The bill would also widen the 15 percent tax bracket for married couples, effectively placing some in a lower tax bracket. For 2003, the threshold would jump nearly 20 percent, from $47,450 to $56,800. With these changes, a couple earning $30,000 could keep $800 they now pay in taxes, while a couple earning $80,000 could pocket more than $1,300.
The bill also would increase the Earned Income Tax Credit (EITC) phase-out levels for married people. The EITC, which is given to people whose wages are too low to pay taxes, is an important benefit for some of our nation's poorest citizens. By increasing the phase-out level, we help reduce the risk that low-income workers will lose their benefit simply by getting married.
This is a surefire way to put money in people's pockets and will help give the economy a needed boost. Nearly half of all married couples in America currently pay a marriage penalty, and on average they pay $1,400 more each year in taxes than they would if they were single. The legislation I introduced would benefit an estimated 35 million married couples by increasing the standard deduction by an average of $1,500 for married couples filing jointly this year. In Texas alone, this bill would benefit an estimated 2.4 million families.
I have introduced this bi-partisan legislation along with my colleague from Indiana, Sen. Evan Bayh, because we want to ensure this issue is quickly addressed by Congress. In the current economy, it is critical we enact immediate tax relief so couples can spend more of their hard-earned money to meet their needs – not the government's. I look forward to working with my colleagues in Congress to make sure the dreams and hopes of couples across the country no longer help line the coffers of the IRS.
January 17, 2003