Senate Floor Speech
Senator Kay Bailey Hutchison
May 17, 2001 -- Page: S5049

MRS. HUTCHISON. Mr. President, first, I respect the distinguished chairman, Senator Grassley, and his ranking member, Senator Baucus, for crafting the tax reduction bill. I know and understand in order to get a complicated and very important bill through a committee that is evenly divided, many compromises must be made. I know Senator Grassley would not have written the bill exactly this way, nor would Senator Baucus, had they been able to write it by themselves.

It is with great respect I offer my amendment that somewhat changes the order of the bill, although it is not a huge deviation.

Looking at their timetable, I realize how difficult it was for them to say which tax relief comes in the early years and which comes in the later years. When I decided I wanted to try to move the marriage penalty up, it was hard to find something to trade. It was hard to find the offset. Everything in the early years is a very important tax cut and it represents very important tax relief for every American family.

I agree with Senator Conrad, we should bring the marriage penalty up earlier, but I disagree with his offset. I think the cut in the tax rates for every working American is the very highest priority. I am going to offer an amendment that would bring the marriage penalty relief up to 2002, rather than beginning in 2006 as in the underlying bill. My offsets are the deductions for some of the education expenses being streamlined over a longer period of time.

In the bill before the Senate, the marriage penalty relief starts in 2006 and ends in 2010; my marriage penalty standard deduction doubling starts in 2002 and ends in 2008. It is fully effective in 2008. We have the full doubling of the standard deduction by 2008, starting in 2002. In order to achieve that, it was necessary to streamline the phasing in period of the education IRA and the education expenses that have the added deduction. The deduction maximum for the education expenses under my bill in 2002, would be $1,500; 2003, $2,000; 2004, $3,000; and in 2005, $5,000. Under the underlying bill, all of the deductions end in 2005. My amendment does the same.

There would be a phasing in difference and it does chip away at the phase-in of the deduction for education expenses. The tradeoff is we double the standard deduction, starting immediately in the 2002 year.

These are tough choices. There is no doubt about it. I understand that. I have been working on marriage penalty relief for the last 4 years. We have passed it in the Senate twice, but it was vetoed by President Clinton. Today we have a chance to finally begin the process of relieving the marriage penalty.

The marriage penalty came about as an accident. Congress doesn't mean to tax married people more than two single people living together individually would be taxed. But it did happen that the Tax Code has evolved so that there is not a doubling of the standard deduction when two people who are single get married; there is not a doubling of the 15-percent bracket or the 28-percent bracket or the 33-percent bracket or the 39.6-percent bracket or any other bracket. There is no doubling.

In the underlying bill, the relief for the 15-percent bracket, the full doubling, which gives every working American that doubling capability, is there. The doubling of the standard deduction is there. But it doesn't start until 2006.

I am trying to double the standard deduction beginning in 2002, to at least start the relief from the marriage penalty tax.

Fifty million couples in this country are affected by the marriage penalty. We received a census report in the last 10 years, and we see a dramatic 77-percent rise in the number of single people who are living together, unmarried. I am not trying to tell anybody how to live. But I think the marriage penalty has something to do with that. I have had people tell me they are delaying getting married until we fix the marriage penalty. Whether or not that should be a factor is not for us to judge, but nevertheless we should not have a Tax Code that penalizes people who get married.

Generally, people who get married need more help, not less, because their expenses are more. They may have to have a house on which they want to make a downpayment, whereas before they lived in an apartment. They may need another car. There are any number of added expenses. Of course, if the couple starts having children, we know there are more expenses.

We want to encourage the family. It is the stability in this country that gives people the infrastructure they need to get through life. We want to encourage that. We certainly don't want to do something in government policy that discourages families.

I understand how hard it was for the committee to make the tough choices, but I address the marriage penalty relief earlier in the bill. Although I like all of the education deductions, I phase them in at a slower rate in order to move the doubling of the standard deduction up to the front.

I think the significant tax relief that the American people are going to get from this bill is a tribute to those who wrote it and to the President of the United States, who made it his priority. I think it is very important we give tax relief. I am so pleased we are giving tax relief in the form of a tax bracket reduction for every single working American. That is why I could not go along with Senator Conrad's approach to doubling the standard deduction and relieving the marriage penalty in lieu of the rate cuts. Single people get the rate cut and married people get the rate cut and that is the way it should be.

Everyone should get the biggest tax relief, and that will come from the rate cuts. So I would not put the marriage penalty in front of the rate cuts. But I do put it right after the rate cuts, which is why I have chosen to go a different route from Senator Conrad.

I am very proud that we will be giving a rate reduction to every single working American. I am proud that we are going to take away the onerous burden of the death tax so a family-owned business or a family-owned farm or family-owned ranch will not have to be sold, putting all the people who work for that family-owned business out of work, because passing our family businesses from generation to generation will keep small business strong.

It is small business that is the economic engine of America. It is not big international conglomerates that are the economic engine of America. I want to preserve our family-owned businesses and farms and ranches as much as we can. The elimination of the death tax is the best way to preserve family-owned businesses and farms and ranches. All the people who work for those family-owned businesses should have job stability and not worry about being taken over by some big international conglomerate that is going to eliminate their jobs. I certainly favor the elimination of the death tax.

Doubling the child tax credit is another facet of this bill that I support fully. Everyone who has children knows how expensive it is to do for them all the things that you want to do, that would give them a better chance: The music lessons, the dancing lessons, the clothes, the soccer uniforms, the baseball uniforms--all the things you want to give them so they learn team spirit and sportsmanship, seeing what talent they might have and nurturing that. All those things cost money. We know that. We want to give relief through the child tax credit.

The bottom line is this is really a good bill. It is a good bill because it gives tax relief to every working American: Single, married, parents, not. It gives relief to every working American, and it promotes job stability. That is important.

My amendment is not meant to in any way say the committee did not do its job. The committee did a great job. I just want to make it a little better. I hope we can bring the marriage penalty up and streamline the education deductions and thereby add more relief from the marriage penalty and try to increase the capability for those in our country who have chosen not to get married because they really need that extra $1,400 a year that they get.