House votes to remove ‘marriage penalty’ tax

By Curt Anderson

Associated Press

WASHINGTON — The House voted Tuesday to provide about 21 million couples with relief from the tax "marriage penalty" beginning in 2003, two years earlier than scheduled under current law.

Intended to complement welfare reform legislation passed by the House last week, the tax measure would affect mostly lower- and middle-income couples who claim the standard income tax deduction rather than itemizing.

Many of these couples, generally those with two roughly equal incomes, are penalized under tax laws because their standard deduction is lower than that available for two single people. The measure passed 409-1 on Tuesday would begin equalizing those deductions more quickly than under last year’s 10-year, $1.35 trillion tax cut.

"The bottom line is, today we want to eliminate the marriage tax penalty," said Rep. Jerry Weller, R-Ill.

In addition, the bill would combine two job-related tax credits into one, with a single set of requirements and rules, for employers who hire former welfare recipients and other disadvantaged people. All told the measure would cost $906 million over 10 years.

Although every voting Democrat but one — Rep. Alan Mollohan of West Virginia — supported the measure, several complained that Republicans were adding to the budget deficit.

Democrats suggested that the cost could be easily met by passing legislative intended to halt the parade of U.S. companies that are reincorporating in tax havens such as Bermuda to cut their U.S. tax bills.

"They went there for tax purposes and everybody knows it," said Rep. Jim McDermott, D-Wash. "They want the protection of the United States, they want the military … but they don’t want to pay for it."

House GOP leaders, however, refused to allow a vote on a Democratic amendment addressing the tax haven issue. They said the House Ways and Means Committee will hold a hearing on the subject June 13.

The marriage penalty bill goes next to the Senate, where its chances of passage are far from certain.