Senate Floor Speech
Senator Kay Bailey Hutchison
February 3, 2000 -- Page: S308

MRS. HUTCHISON. Mr. President, today, for the next 30 minutes, we are going to talk about a subject that I think perhaps is the highest priority we have in Congress, and that is to correct a terrible inequity in the tax laws of our country--a penalty that we exact on married couples.

You may ask, penalty on married couples? Are you serious? Well, the fact is, yes, I am serious. The Tax Code, over the years, has not kept up with what has happened in our country demographically, which is that over 64 percent of the married couples in this country today have two incomes; both spouses work outside the home, in addition to working inside the home. The Tax Code has not caught up to treating them fairly when they get married. In fact, what has happened is that we have not increased the standard deduction to be double for a two-income-earning couple; nor have we expanded the tax brackets for a two-income-earning couple. So if you take the example of a schoolteacher and a sheriff's deputy or a policeman, one of whom makes $27,000 a year, the other of whom makes $31,000 a year, they will pay an extra $717 in taxes just because they got married.

Now, generally, this is a young couple who is getting married, who need the extra money now more than ever. It is a couple who want to buy their first home, want to have their first child, want to buy the extra car they will need to fulfill their responsibilities. But, in fact, we take money away from their ability to fulfill their hopes and dreams.

Americans should not have to choose between love and money and, most certainly, the Government should not encourage this. We need to have policies that encourage marriage, encourage families.

I read an interesting article recently pointing out that marriage is one of the key factors in determining poverty. One in three poor families is headed by an unmarried parent. In contrast, 1 in 20 married couples are considered to be in poverty. So being married is one of the factors in people being able to lift themselves out of poverty. So, of course, knowing this, we should be even more attuned to this inequity.

The Congressional Budget Office estimated that 21 million married couples are paying this penalty; that is, 42 million Americans are paying a higher tax because they are married. This tax hits hardest those couples with two incomes. Two-thirds of those married couples, that have two incomes, will pay a tax penalty simply for being married. These couples are paying an average of $1,400 more; that is $29 billion in taxes being sent to Washington--money which our Treasury should not be receiving--$29 billion in money just because people are married and not single.

Why are many people working? In many instances, it is because of the incredibly high tax burden. We have the highest tax burden since World War II on families in this country. Nearly 40 percent of the income families earn goes straight to the tax collector. How can we solve this problem? We can start by increasing the standard deduction for married couples from $7,200 to $8,600. This would make it exactly double what is available to single taxpayers.

Senator Ashcroft, Senator Brownback, and myself have introduced legislation to do exactly this. That should be our very first step. In fact, that is exactly what the Congress passed last year and sent to the President, but he vetoed it. It was part of a balanced tax package that would have put $790 billion back in the pockets of the taxpayers of this country. But the President chose to veto that legislation.

This same legislation was introduced this week by Congressman Archer, chairman of the Ways and Means Committee on the House side. His legislation would increase the standard deduction in 2001 for married couples to twice the rate applicable to singles.

The second thing we can do is to widen the tax bracket for married couples so that it is twice the size of the corresponding bracket for singles.

Let me give you an example.

A married couple is taxed at the 15-percent rate up to $43,350 in income. But if two single people make the same salary, they could be taxed at 15 percent on income up to $50,700. That means $7,350 is taxed just because people are married.

We need to change this policy. Senator Ashcroft, Senator Brownback, and myself have introduced a bill that would adjust every bracket so that married couples would not pay a penalty. They would not go into higher tax brackets just because they are married. If one person makes $20,000 a year, and another makes $55,000 a year, they should pay taxes on what they earned, not putting it together and penalizing them by making the entire $20,000 that is earned by one spouse to be taxed at the higher 28-percent bracket of the other spouse.

This week, Congressman Archer introduced legislation that would widen the 15-percent bracket. This is clearly the right direction. But I also want to make sure we don't forget those people in the 28-percent bracket. They get hit hard by the marriage penalty as well. The people who move up to the 28-percent bracket when they are earning the 15-percent bracket salaries should not pay that penalty. That is what we are trying to correct.

Senator Ashcroft, Senator Brownback, and I have introduced this legislation for 3 straight years. We have tried to get the President to sign tax relief for our married taxpayers.

Yesterday, the House Ways and Means Committee reported legislation out, and it will be considered on the House floor next week. This is a great step forward. It is a step in the right direction. I commend Chairman Archer for acting so quickly.

I hope we can pass a balanced tax bill this year. I hope we can make the linchpin of that bill the marriage tax penalty relief.

But that is not the only tax relief that our people in this country deserve, and the working families deserve. They also deserve tax credits for education expenses, and tax credits for caring for elderly parents, which is becoming a bigger problem--a bigger issue--as our population is aging.

We want to make sure small businesses and farmers and ranches don't have to be broken up because of the inheritance tax.

We want to try to make sure we have capital gains tax reductions so that people will be encouraged to invest in our country to help spur our economy forward.

We have a lot of wage earners who will be coming into our economic system. We want to make sure we can absorb them. The way we can do this is by creating new jobs. The way you create new jobs is to invest in capital.

I want a balanced, good tax cut bill. I want to say very clearly that we are not talking about taking the entire surplus and giving it back to the taxpayers of our country. We have bifurcated our surplus. We have said that trillion dollar plus in surplus funds that belongs to Social Security is going to stay in Social Security, so that will always be there. It will be part of a trust fund, and Social Security will be safe forever.

What we are talking about is an income tax withholding surplus. This is the surplus that people have sent to Washington in income taxes--not Social Security taxes. We are talking about taking approximately one-third of the income tax withholding surplus and giving it back to the people who sent it to Washington because it is very clear that if we don't give it back to the people who sent too much, it will sit here and it will eventually go away. There is nothing like the creativity of the Federal Government when it comes to spending more money.

Mr. President, we want to give people the bonus they have sent to the Federal Government back. We want them to make the decisions for their children about how they are going to spend the money they earned that belongs to them. That is the bonus they deserve.

We are going to make marriage tax penalty relief the linchpin of our balanced tax cut plan, and we are going to put in capital gains tax relief and inheritance tax relief and relief for people who are sending their children to college, or perhaps to a private school that has a huge tuition fee. That is very difficult for the family to absorb.

Sometimes when I talk to my friends and people who I meet in airports and in cities I visit, the second spouse is working for education expenses for their children, or for the expense of caring for an elderly parent. We want to help them.

I think we can get a balanced tax cut for the working people of this country that will give them the relief they deserve because they sent more money to Washington than we need for the services we must cover.

I am very proud that I have two cosponsors who have worked so diligently with me to try to keep this issue in the forefront of issues the Senate will address. Senator Ashcroft from Missouri and Senator Brownback from Kansas have been cosponsors of my legislation every time we have tried to push it through. Last year, we won. But the President said no. We are coming back until we win this for the married couples of this country so they get the money they earned in their pocketbooks to decide what is best for their families--not somebody in Washington, DC, they have never met making that decision for them.

I am proud Senator Brownback is here to talk about how this affects families in Kansas, his home State. And later I am hoping Senator Ashcroft will be able to also come and talk about the legislation we have tried so hard to push through, and which I hope this year will be the one that we see the victory for the hard-working people of our country.

Thank you, Mr. President.