Journal and Courier - Say 'I Do' to the end of tax code's marriage penalty

Journal and Courier (Lafayette, IN)

Say 'I do' to the end of tax code's marriage penalty

When a couple makes the commitment to join in marriage, they're showered with gifts, well wishes and hope for the future. However, many receive a present from Uncle Sam, too - higher taxes.

This time of year, as Hoosiers and all Americans file taxes, shouldn't the federal government give couples a break? Americans should not have to pay more taxes simply for saying "I do." Yet punitive tax laws force them to do just that. Nearly half of all married couples currently pay a marriage penalty, and on average they pay $1,400 more each year in taxes than they would if they were single.

How does this work? Our tax code punishes married couples that file jointly by pushing them into higher tax brackets. It taxes the earnings of the second wage earner - often the wife's income - at a much higher rate than if that person were taxed as an individual.

Fortunately, in 2001, Congress stepped in the right direction, passing tax relief that included eliminating the marriage penalty for millions of couples. Unfortunately, this relief is being slowly phased in over several years and because of procedural rules in the Senate, this tax relief is due to "sunset" after 10 years. In 2011, the relief will vanish entirely and the penalty will reappear. One of Congress' priorities in 2003 should be to accelerate this tax reform and make it permanent.

That's why in January we 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. This is also a key element of President Bush's economic proposal. We have introduced this bipartisan legislation because we want to ensure this inequity is quickly addressed by our colleagues this Congress.

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, so they are not pushed into a higher tax bracket when they combine their incomes. For 2003, the top threshold would jump nearly 20 percent, from $47,450 to $56,800. With these changes, a couple with two children, earning $30,000 could keep $800 they now pay in taxes, and a couple with a combined income of $80,000 could retain more than $1,300.

The bill also would increase the Earned Income Tax Credit (EITC) phase-out levels for married people by $3,000. The EITC, which is assistance for people whose wages are too low to pay federal taxes, is an important benefit for some of our nation's poorest citizens. By increasing the phase-out level, we will eliminate a disincentive to marriage by reducing the risk that low-income workers will lose their EITC benefit simply by getting married.

This bill is good economic policy because it would provide $19 billion this year alone for married couples to invest in the American economy. This will make a difference for 35 million American families - including 812,000 families here in Indiana - who are also the most likely to spend, so it's a surefire way to give the economy a needed boost. In the current climate, it is critical we enact immediate tax relief so couples can spend more of their hard-earned money to meet their own needs.

And it is good social policy as well, because it's just not fair to penalize people for getting married. In fact, as we attempt to combat a whole host of societal ills, our government should do all it can to nurture families and help them provide a good environment in which to raise their children.

This Tax Day, let's pledge to give American families something to celebrate - let's eliminate the marriage penalty forever.