Eliminate Marriage Penalty, Lawmakers Urge Clinton

Wednesday, Jan. 14, 1998

OnLine

More than 100 legislators, including House Speaker Newt Gingrich, R-Ga., wrote President Clinton Jan. 14 urging him to endorse marriage penalty tax relief in his State of the Union address Jan. 27.

Despite last year’s "effort to put more money back into the pockets of working middle class families, our tax code continues to punish and undermine the traditional institution of marriage," House Ways and Means Committee member Jerry Weller, R-Ill., said at a press conference.

Weller was joined by Rep. David McIntosh, R-Ind., in urging Clinton to do something about the marriage penalty, which causes some couples to pay a higher tax after they are married than their combined tax bills would have been if they remained single. McIntosh is the GOP sophomore liaison to the House leadership.

Weller and McIntosh have introduced the Marriage Tax Elimination Act (H.R. 2456), which would allow married couples to divide their income so they can pay taxes at the rate for individuals, rather than the rate for married couples. The bill has about 230 co-sponsors, including a handful of Democrats.

Eliminating the marriage penalty has become the centerpiece of the GOP proposals to cut taxes and use the projected budget surplus as the revenue offset. Now that the budget deficit has been almost completely eliminated, GOP lawmakers want to cut taxes as a way to reduce the size of the government.

President Clinton opposes broad tax cuts and instead favors targeted, small-scale cuts. Cutting taxes would risk creating a new budget deficit, at a time when the deficit finally has been brought under control, he argues.

Expect IRS Hearings Early in the Year: The Senate Finance Committee plans to hold hearings as early as late January on House-passed legislation to restructure the Internal Revenue Service (H.R. 2676), congressional sources said. The Senate is expected to pass IRS restructuring legislation by April.

The House Ways and Means Committee also will hold hearings early in the year and probably will look into issues such as ways to eliminate the marriage penalty, the need to simplify the capital gains tax rate structure, and savings and investment incentives, congressional sources said.

President Favors Expanded Housing Credit: Vice President Al Gore announced Jan. 13 the President will propose an increase in the low-income housing tax credit as part of the fiscal 1999 budget, which will be unveiled Jan. 28.

"Americans of all income levels deserve safe, affordable housing," and to achieve that goal the credit should be increased by about 40%, said Gore. Precise details about the proposal will be included in the budget.

The proposal to expand the credit may run into interference in Congress, where House Ways and Means Committee Chairman Bill Archer, R-Texas, last year explored phasing out the credit as a possible revenue-raising option.

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