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The Republicans have brought the estate tax, marriage penalty tax, medical savings accounts, and the telephone excise tax to the
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I. MARRIAGE PENALTY TAX< p> This bill should target tax relief for those who need it most. Unfortunately, the GOP proposal actually helps wealthy Americans, not simply those facing a tax penalty due to marriage by implementing a tax bracket change favorable to those in the top brackets. There are nearly as many families that receive ``marriage bonus'' as receive marriage penalties in the U.S. As much as half of the $182 billion in tax relief in the GOP bill will go to families who receive the bonus and are not hurt by the marriage penalty. This bill's costliest provision, expanding the 15% tax b racket, only benefits taxpayers in the top quarter of the income distribution. This accounts for 65% of the plan's total cost, or nearly $100 billion. This bill's title implies that it helps those who are faced with a marriage penalty when it truthfully benefits the wealthy.
II. ESTATE TAX The estate tax re peal--and the numerous other tax me asures passed by the House--should be scrutinized with a measure of fairness. It hardly seems fair to come to the floor of the House week after week to provide hand over fist full of tax br eak dollars to the wealthiest U.S. taxpayers, when we haven't even addressed Medicare's solvency. The estate tax bi ll is the most egregious of all of
the tax bi lls that have come before the House for a vote. It spends the most amount of money--$105 billion--on not just the wealthy, but the very wealthy. Ninety percent of the tax cu t benefits will to go to those in the top 1% income group--those earning $319,000 per year and with estates over $20 million. Clearly this is a tax bre ak for the rich.
III. PENSION REFORM
The Ways and Means Committee is scheduled to markup the pension reform bill tomorrow and it's expected to be on the floor sometime next week. While many of my colleagues would like to believe that this package of reforms will help to increase pension coverage for working Americans it will do exactly the opposite. Trickle down economics didn't work for Reagan and it won't work for pensions. This bill will directly help those executives who earn $200,000 per year. This bill will purely benefit the rich when not one provision is included to help increase pension coverage for low and middle-income workers.
IV. MEDICAL SAVINGS ACCOUNTS
The Republicans want to appear as though they are helping the average American worker so they decided to include medical savings accounts (MSAs) in the Patients Bill of Rights. The greatest savings from MSAs will help workers who have little or no health care expenditures. It allows people with low health costs to avoid taxes through essentially a new form of an IRA. And the Republicans go even further by allowing people to withdraw money from their MSA without any tax pen alty if they maintain the deductible of $1,000 for individuals and $2,000 for families. This isn't a health proposal at all--it's just more money for the rich.
V. TELEPHONE EXC ISE TAX
While this isn't a bill to directly help wealthy Americans, its primary purpose is to help wealthy corporations. This is just another fiscally irresponsible way for the Republicans to reduce federal revenues for the vital programs that the working families of this country rely on. The leadership of the 106th Congress doesn't care if it squanders another $20 billion in tax revenues by repealing the telephone excise tax. The GOP doesn't care if we have enough money to save Social Security and Medicare for future generations or to give our seniors a Medicare prescription drug benefit.
The Democratic substitute bill targets those workers who need it most. The Democratic substitute addresses the marriage penalty by giving married couples a standard deduction twice that of single people. In addition, low-income married couples face a marriage penalty in the earned income tax cre dit. The Democratic substitute would reduce those penalties by increasing the income level at which the credit begins to phase out by $2,000 in 2001 and by $2,500 in 2002 and thereafter. It would also repeal the current reduction in the EITC and refundable child credit by the amount of the minimum tax. Th e Democratic substitute is the responsible way to address the marriage penalty tax wit hout pandering to the wealthiest 2% of U.S. earners. I urge my colleagues to support the Democratic substitute and oppose H.R. 4810.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today to state my opposition to this bill being adopted in its current form. We should offer relief from the tax burd ens, which may be imposed by our nation's current marriage tax poli cy only to those who are in need of help.
As founder and co-chair of the Congressional Children's Caucus, I do share many of the leadership's concerns regarding the promotion of stable and secure marriages in our society. After all, the foundation of any civilization is the strength of its families. Therefore, I believe that we should seriously consider passing legislation that will provide true relief for those pending marriages which are threatened by our nation's current marriage tax poli cy.
For this reason I have joined my fellow Democratic colleagues in voicing opposition to H.R. 4810, the Marriage Penalty Tax elim ination Reconciliation Act as it is written because it does less than what it is being purported to do. For example, it will not provide marriage penalty tax reli ef for the poor of our society who face many hurdles to finding stable footings upon which to build lives for their children and families. In addition to this concern, H.R. 4810 provides a tax brea k mostly to the very wealthy. This fact alone taints the image that many in this body would like to project to Americans, that our actions have the altruistic intent of only helping those young people in our communities who are just starting out in life and who would like to marry.
I would suggest to those Americans who eagerly await our actions in this matter pay close attention to what this body is actually attempting to do. Our efforts today should not be based on tax cut slight-of-hand and short-sided actions on the issue of marriage.
All of us present understand that the institution of marriage is very important. I personally believe that it is sacred, and for this reason we should be very careful about what we do as a legislative body, in an area that is after all a personal decision. We should be very sure that any legislative changes made to any benefit for our citizens has the effect of supporting the institution of marriage in real and meaningful ways.
I would ask my colleagues to remember the struggle shared by them and their spouses when they first married. For this reason, I am very supportive of Congressman's RANGEL's substitute amendment to this bill. I applaud Congressman RANGEL's attempts to reach some middle ground on this issue with the majority, and thank him for bringing before this body an opportunity to have a rational discussion regarding the marriage tax poli cy of our nation. As the bill is currently written, the tax pena lty to the federal government should this bill become law would be $182 billion in lost government revenue.
Like the bill, the Rangel substitute would reduce the marriage tax pena lty by increasing the basic standard deduction for a married couple filing a joint income tax-retu rn to twice the basic standard deduction for an unmarried individual, and adjusts the Alternative Minimum Tax in a n attempt to ensure that the benefits of the standard deduction change would not be nullified. However, an added benefit of the Rangel substitute is that it will also reduce the marriage tax pena lty by modifying the tax code in order to make more married couples eligible for the Earned Income Tax Cred it beginning in 2001. Additionally, the Rangel substitute will increase the income level at which the credit begins to phase out by providing $2,000 in 2001 and $2,500 in 2002 and subsequent years. I would add that unlike the bill, the substitute does not provide for an increase in the upper limit of the 15% tax brack et. I would hope that this body not endorse a tax cut f or the wealthy under the guise relief tax relie f for newly married young couples.
This body did not do all that it could have done to promote the stability of marriage among our nation's senior population with the passage, of what was called, the senior's prescription drug benefit bill that was passed prior to the July 4, break that legislation merely gave insurance companies more money. If the marriages of our elderly poor are shattered due to the high cost of health care and in particular the financial stress created by the unfair cost of prescription drugs then the security of their marriages as well as their lives together are threatened. We should take the opportunity presented to us through the consideration of the Rangel substitute to make amends for some of the lack of attention given to real life problems through the adopting of a marriage penalty relief bill that will provide real tax relie f to real people.
Mr. KIND. Mr. Speaker, I rise today in opposition to H.R. 4810, the Marriage Tax Penal ty Relief Reconciliation Act of 2000. This bill is the exact marriage penalty relief bill that was passed in February. So I must ask why are we wasting valuable time debating legislation that has already been considered and which the president threatened to veto last February? It is time that we provide tax relie f for those couples that are truly penalized and then use the remaining time in this session to do what the
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While I support tax relie f for those couples who are penalized, I do not, support H.R. 4810 which would provide tax relie f half of which will to go those couples who benefit from a marriage bonus rather than a marriage penalty under the current tax code. Further, this bill would cost $182.3 billion over the next ten years and would give the lion's share of its tax cuts to higher-income families. The average tax cut f or families with incomes less than $50,000 would be about $149 per year, while families with incomes over $75,000 would get an average tax cut o f nearly $1,000 per year. That is why I oppose H.R. 4810 and support the substitute offered by Representative Rangel, which is fairer and more fiscally responsible.
The substitute would do a better job of fixing the marriage penalty, and cost less than half as much as H.R. 4810. It would assure that the Alternative Minimum tax (AMT) does not deny the tax relie f the bill promises. The AMT ensures that everyone pays at least a minimum tax. Unde r H.R. 4810, many married couples with children will not get the advertised tax relie f because they fall under a complex set of AMT rules. When this bill was drafted behind closed doors, it ignored the effect of the AMT. As a result, by 2008, nearly half of the American families with two children would be under the minimum tax and r eceive nothing or less than what H.R. 4810 promised.
Like the bill, the substitute would reduce the marriage tax penal ty by increasing the basic standard deduction for a married couple filing a joint income tax retur n to twice the basic standard deduction for an unmarried individual. The substitute also would reduce the marriage tax penal ty by modifying the tax code in order to make more married couples eligible for the Earned Income Tax Credi t (EITC) beginning in 2001. It would increase the income level at which the credit begins to phase out by $2,000 in 2001 and by $2,500 in 2002 and thereafter.
Mr. Speaker, I urge my colleagues to do what is right for the American people and oppose H.R. 4810 and support the substitute that provides genuine relief for our citizens who are truly penalized.
Mr. PASTOR. Mr. Speaker, with great regret, I rise today in opposition to H.R. 4810. The regret is not only because I must oppose this bill, but because my friends on the other side of aisle are unwilling to enact true and meaningful reform that benefits all American citizens. Instead, we are being presented with proposed legislation that will assist couples making more than $75,000 a year at the expense of strengthening future financing of Social Security and Medicare and modernizing Medicare by including affordable prescription drug coverage.
On the surface, this bill appears to be a blessing for all married couples but there will be millions of unhappy tax payer s next April 15th when they learn that they will not benefit from the promises being made today.
Who will benefit? Two-thirds of the actual benefits in this package will go to the 30% of married couples making more than $75,000 a year. Review of the bill by financial analysts indicate that the average tax cut fo r couples receiving more than $75,000 would be $994 a year, compared to a tax cut of only $149 for couples making less than $75,000 a year.
Perhaps the most egregious flaw in this bill is that makes no modifcation to the Alternative Minimum Tax which places a floor on the total amount of deductions which couples may file for each year. By not adjusting that figure, many middle-class families with children will not receive a dime from the sham ``benefits'' contained in this bill. I believe that it is those very families with children who most deserve a marriage tax benefi t.
H.R. 4810 proposes to remove $50.7 billion over five years and $182.3 billion over ten years from the federal budget. We are already scrounging for funds in an effort to pay down the national debt and shore up the Social Security and Medicare funds. Where will this put us in ten years when today's middle-aged married couples are ready to retire?
Mr. BEREUTER. Mr. Speaker, this Member rises today to express his support for H.R. 4810, the Marriage Penalty Tax Elimin ation Reconciliation Act. This bill will have a positive effect, in particular, on middle and lower income married couples.
At the outset, this Member would like to thank the distinguished Chairman of the House Ways and Means Committee from Texas [Mr. ARCHER], for introducing this legislation.
It is important to note that H.R. 4810 has the same provisions as H.R. 6, which passed on the floor of the House on February 10, 2000, by a vote of 268-158, with this Member's support. However, the Senate has been unable to reach the 60 vote threshold on a cloture vote to close debate on marriage penalty legislation. As a result, the House is now considering the marriage tax penalt y as the first reconciliation bill, a status which will allow debate and amendments to be limited in the Senate.
While there are many reasons to support H.R. 4810, this Member will enumerate two specific reasons. First, H.R. 4810 takes a significant step toward eliminating the current marriage penalty in the Internal Revenue Code. Second, H.R. 4810 follows the principle that the Federal income tax code s hould be marriage-neutral.
1. First, this legislation, H.R. 4810, will help eliminate the marriage penalty in the Internal Revenue Code in the following significant ways:
STANDARD DEDUCTION
It will increase the standard deduction for married couples who file jointly to double the standard deduction for singles beginning in 2001. For example, in 2000, the standard deduction equals $4,400 for single taxpayers but $7,350 for married couples who file jointly. If this legislation was effective in 2000, the standard deduction for married couples who file jointly would be $8,800 which would be double the standard deduction for single taxpayers.
THE 15 PERCENT TAX BRACKE T
It will increase the amount of married couples' income (who file jointly) subject to the lowest 15 percent marginal tax rate t o twice that of single taxpayers beginning in 2003, phased in over six years. Under the current tax law, t he 15 percent bracket covers taxpayers with income up to $26,250 for singles and $43,850 for married couples who file jointly. If this legislation was effective in 2000, married couples would pay the 15 percent tax rate o n their first $52,500 of taxable income, which would be double the aforementioned current income amount for singles.
2. Second, H.R. 4810 will help the Internal Revenue Code become more marriage-neutral. Currently, many married couples who file jointly pay more Federal income tax than t hey would as two unmarried singles. The Internal Revenue Code should not be a consideration when individuals discuss their future marital status.
Therefore, for these reasons, and many others, this Member urges his colleagues to support the Marriage Penalty Tax Elimin ation Reconciliation Act.
The SPEAKER pro tempore (Mr. Pease). The time for general debate on the bill has expired.
AMENDMENT IN THE NATURE OF A SUBSTITUTE OFFERED BY MR. RANGEL
Mr. RANGEL. Mr. Chairman, I offer an amendment in the nature of a substitute.
The CHAIRMAN. The Clerk will designate the amendment in the nature of a substitute.
The text of the amendment in the nature of a substitute is as follows:
Amendment in the Nature of a Substitute offered by Mr. Rangel:
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Marriage Tax Penalt y Relief Reconciliation Act of 2000''.
SEC. 2. ELIMINATION OF MARRIAGE PENALTY IN STANDARD DEDUCTION.
(a) IN GENERAL.--Paragraph (2) of section 63(c) of the Internal Revenue Code of 1986 (relating to standard deduction) is amended--
(1) by striking ``$5,000'' in subparagraph (A) and inserting ``twice the dollar amount in effect under subparagraph (C) for the taxable year'',
(2) by adding ``or'' at the end of subparagraph (B),
(3) by striking ``in the case of'' and all that follows in subparagraph (C) and inserting ``in any other case.'', and
(4) by striking subparagraph (D).
(b) INCREASE ALLOWED AS DEDUCTION IN DETERMINING MINIMUM TAX.-- Subparagraph (E) of section 56(b)(1) of such Code is amended by adding at the end the following new sentence: ``The preceding sentence shall not apply to so much of the standard deduction under subparagraph (A) of section 63(c)(2) as exceeds the amount which be such deduction but for the amendment made by section 2(a) of the Marriage Tax Penalt y Relief Reconciliation Act of 2000.
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