Replacing one
tax with another tax ...
In an effort to make raising taxes on low to middle income Americans
more palatable to those opposed to tobacco legislation, Congress passed an
amendment crafted by Sen. Phil Gramm, R-Texas, to cut taxes and eliminate the
Marriage Tax Penalty in exchange for higher taxes on
smokers.
Imagine that! In yet another example of Beltway tax and
spend logic, the Senate wants to approve a tax increase to fund a tax decrease.
These greedy folks in Washington are willing to return a tax that has
been unfairly levied on taxpayers who choose to get married. In 1996, 21
million couples were taxed at a higher rate than couples living together
outside of the marriage covenant. Married couples pay on average $1,400 more in
taxes each year. The Marriage Tax is outrageous, it is unfair, it is
anti-family, and should be eliminated, but this is not the way to do it.
What likely was an attempt by Sen. Gramm to kill the Tobacco Bill with this amendment, turned out to backfire and actually pass.
Gramm's proposal would grant a $3,300 tax deduction, phased in over
several years, for married couples with incomes of under $50,000. Only 25% of
the value of the deduction would be given for 1999, and the break would rise
slowly, reaching 50% in 2006 and 100% in 2008.
Gramm said the cost of
his measure would be $16 billion over the next four years and $30 billion over
the following five years. In all, he said, it would send one-third of the money
raised in the tobacco bill back to taxpayers.
Now, let me get this
straight. Are these Senators graciously reducing taxes on married Americans? I
don't think so. Sounds to me like another Clintonized stealth tactic of
disguising taxes by another name. Get this! Of the $1,000 per person tax
increase this bill would levy, they are suggesting to return $333 of an unfair
tax in exchange.
Well, I'm no math expert but even subtracting $333
from $1,000 still leaves a tax increase of $667 per individual per year. And,
on top of that ... they are reducing this tax increase with money they
shouldn't be taking in the first place. Sounds pretty deceptive to me. Do you
buy that?
Legislation
Removing the Marriage Tax Penalty
Several pieces of legislation have
been passed since the late nineties to do away with these penalties. For
example, the Economic Growth and Tax Relief Reconciliation Act of 2001
introduced section 1(f)(8) to the Internal Revenue Code, which mitigates the
marriage penalty effect in the lower tax brackets. Section 1(f)(8) adjusts the
ceiling of the 15-percent tax bracket for joint return filers relative to the
ceiling of the 15-percent tax bracket for unmarried spouses. The Jobs and
Growth Tax Relief Reconciliation Act of 2003 accelerated the benefit to joint
return filers by eliminating the marriage penalty for 2003 and 2004 and the
Working Families Tax Relief Act of 2004 extended the benefit to 2005-2007.
Therefore, the marriage penalty in the lower tax brackets will be eliminated
through 2010, at which time it could be reinstated.
