FOR IMMEDIATE RELEASE
August 4, 1999
CONTACT: Lisette McSoud Mondello
HOUSE-SENATE COMMITTEE AGREES TO END
MARRIAGE TAX PENALTY
Accepts Hutchison provision to speed up relief
WASHINGTON, D.C. -- U.S. Senator Kay Bailey Hutchison praised the final version of the tax-cut bill Wednesday, as agreed to by House-Senate GOP conferees, which alleviates the marriage tax penalty and provides a host of other tax relief measures. The bill would cut taxes by $792 billion over the next decade.
"I made eliminating the marriage tax penalty my top tax-cutting priority, and Congress has, too. We all pushed hard for this relief," Senator Hutchison said. "The final version of the bill gives tens of millions of taxpayers something to smile about -- and take to the bank."
The bill gradually doubles the standard deduction for married couples who file jointly. Under current law, the standard deduction for single taxpayers is $4,300, but just $7,200 for couples filing jointly. Beginning in 2001, the second full year the bill is in effect, the standard deduction inequity will begin to phase out towards a full doubling of the single deduction for joint filers.
In addition, it adjusts the 15 percent rate bracket for married couples to two times the single bracket, beginning in 2005, and to be fully phased in by 2009.
Other significant tax-reduction provisions of the bill include:
- Allows those over age 50 to make catch-up payments to pension plans (such as 401(k)s) and Individual Retirement Accounts. This will benefit, in particular, women who return to the workforce after raising children. A similar provision was first offered by Senator Hutchison in 1997.
- Increases the maximum allowable contribution to Individual Retirement Accounts to $5,000 from $2,000.
- Phases out the death tax.
- Provides additional personal exemptions to those providing long-term care to elderly family members.
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