The "marriage penalty," as it is called, has been a favorite target of Republican ire for years. The quirk of the tax system causing some non-married couples to pay less in taxes than they would if they were married has attracted the attention of social conservatives and tax-cutters alike, providing in some cases an economic disincentive to marriage. Even the triangulating President Clinton has taken up the standard and called for an end to the marriage penalty. Unfortunately, the bill to end the marriage penalty that passed the House of Representatives Feb. 10 served more as a platform for wide-scale tax cuts than a targeted amelioration of a specific problem.
Marketed as a Valentine's Day present to tax-obsessed lovers, the bill would close the marriage gap for those who currently suffer from it by increasing the standard deduction for two-earner households and raising the payments to married couples under the Earned Income Tax Credit, a worthy program that supports the working poor. However, the bill would also move many well-off married couples from the 28-percent to the 15-percent tax bracket, regardless of whether they were affected by the marriage penalty or not. As a result, according to the research group Citizens for Tax Justice, the plan would give almost two-thirds of its ten-year, $182 billion largess to families with incomes over $75,000 a year.
Of course, ending the marriage penalty doesn't require a cut in taxes. At least one revenue-neutral alternative has been proposed in which married people would pay a little less and single people would pay a little more, causing the gap to disappear. Unsurprisingly, however, Congress preferred to use the opportunity for a tax cut, and rather than be left portrayed as anti-marriage, the Democrats decided to join in to the tune of $89 billion over 10 years. The Democratic alternative, rejected before the GOP bill's passage, would have called for increases in the standard deduction and the EITC, costing only half as much and giving 60 percent of its benefits to households earning less than $50,000 annually. Clinton and Texas Gov. George W. Bush have both put forward more focused plans which are even less expensive.
Although the bill will likely face a veto by Clinton should it reach his desk, Democrats and "compassionate conservatives" like Bush should not hesitate to distance themselves--even in an election year--from what is clearly a sprawling tax cut. The fact that the Democratic alternative was conditioned on the development of a long-term plan to address debt reduction, Social Security and Medicare indicates that there are better uses for federal money than a large, regressive tax cut that mainly benefits the wealthiest 30 percent of married couples, many of whom are not subject to the marriage penalty in the first place. Those considering proposing to their loved ones today will just have to wait for reasonable tax relief.
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