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U.S. News Archive
March 29 - March 31, 2001



This page contains news for the period March 29, 2001 through March 31, 2001.  

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Friday, March 30, 2001

'Bastard' cut from Delaware code

A story released today by the Associated Press reports that a conservative Delaware lawmaker argued on the House floor yesterday that referring to an out-of-wedlock child as a "bastard" in state code was acceptable if it embarrassed unmarried couples into not having children.

"We should recognize that a sense of shame throughout history has been a wonderful corrective aspect of personal behavior," said Wayne Smith, the republican who also is House majority leader.

"I do not mean to impugn the individuals who are in this situation," he said. "I also feel very strongly that government ought not to sanction behavior, which I think we can mostly agree, is less than desirable."

Despite Smith's argument, the bill deleting the word "bastard" breezed through 35-1, with five representatives absent.

Smith was the sole dissenter against the measure.

The bill would replace the word "bastard" with the phrase "non-marital child" throughout state code.

Rep. Helene Keeley, D-Wilmington, who wrote the bill, said the phrase "non-marital child" was preferred by the American Association of Single People, an organization she said she worked with in drafting the bill.

Keeley said she wrote the bill because she was so upset that children were being openly referred to as "bastards" in places like Family Court.

Other lawmakers supporting spoke in favor of adopting the legislation, noting that the children labeled as bastards had little influence over the behavior of their parents.

"To me the term is a derogatory term and it is attached to the child," said Rep. Bruce Reynolds, a Bear Republican. "I don't think it reflects the shame back to the parent as much as to the child, who had no choice in the decision that was made - or the lack of a decision that was made."

 Smith defended his floor speech, urging votes against the measure.

"I see this attempt to destigmatize this term, change this term, eliminate this term as perhaps giving up the battle of trying to describe the situation as something that is less than ideal or that has a sense of shame," Smith said.

The legislation now heads to the Senate. Several senators already have signed on as co-sponsors.

House passes bill reducing marriage penalty for some, increasing marriage bonus for others

A story published today in the Los Angeles Times reports that the House on Thursday approved a bill that would provide $400 billion in tax cuts over the next 10 years for married couples and people with children.

In a rare show of bipartisanship in a chamber that has been bitterly divided over Bush's budget and tax plans, the bill was approved, 282 to144, with 64 Democrats joining all voting Republicans in support.

The bill aims to reduce the "marriage penalty," a quirk in the tax code that forces almost half of all couples to pay more in taxes after they marry than if they had remained single and filed individually.

But the bill goes far beyond addressing that anomaly, giving tax cuts to all married couples--not just those hit by the penalty. It also includes provisions to gradually double the $500-per-child tax credit that families now receive.

The family tax cuts are the second element of the Bush tax plan to clear the House. Earlier this month, the House voted along party lines to approve across-the-board cuts in income tax rates--the centerpiece of Bush's plan to reduce taxes by $1.6 trillion over10 years.

Next week, the House will vote on a bill to gradually eliminate the estate tax, another element in Bush's plan. But, as approved by the House Ways and Means Committee, the measure would phase out the tax more gradually than the president proposal. The bill would also replace estate taxes with increased taxes on capital gains accrued when an heir sells an inherited asset.

House GOP leaders made these adjustments in response to estimates showing that implementing Bush's repeal would be prohibitively expensive. The focus of the bill passed by the House is to reduce the marriage penalty, paid by about 42% of all joint filers.

The penalty hits hardest on two-earner families. An estimated 25 million married couples pay an average of $1,400 more than if they had remained single. As a result, proponents of the bill argued, the tax code provides a financial disincentive for couples to get married.

As approved, the House bill would:

* Allow more of married couples' income to be taxed at the bottom tax rate of 15%. It would do that by widening the 15% bracket so that it would eventually be twice the size of the bracket for single taxpayers. This change would not be fully implemented until 2009.

* Increase the standard deduction for couples so that it would be twice the size of the deduction for single taxpayers.

* Raise the income threshold for low-income couples to qualify for the earned income tax credit, which provides relief for working couples.

For families with children, the bill follows the Bush plan and would increase the child credit from $500 now to $1,000 in 2006.

But the House bill would make the first step of the increase effective in 2001, instead of 2002, as Bush proposed.

The House rejected Bush's proposal to allow more upper-income people to qualify for the credit by raising the eligibility income ceiling from $110,000 to $200,000 for married couples.

The House bill also would increase relief to lower-income working families whose tax liability is too low to take full advantage of the child credit. Under current law, such families can receive refunds up to the amount they owe in payroll taxes if they have three or more children. The House bill would allow those partial refunds to all families with children.

The House version of the estate tax bill that comes up for floor debate next week would provide $193 billion in relief over 10 years as compared to the $267-billion on Bush's proposal.

The House bill costs less, in part, because it would not completely eliminate the estate tax until 2011 which Bush wanted repealed by 2009.

Right now, only about 2% of people who die actually pay the estate tax because it applies only to inheritances in excess of $675,000, a threshold that is scheduled to rise to $1 million later this decade. There has been strong bipartisan support for
reducing or repealing the estate tax because many farmers and small-business owners have complained that heirs are forced to liquidate their inheritances in order to pay taxes that reach as high as 55%.

In an important change from Bush's proposal , the House bill modified the way capital gains are calculated when an heir sells an asset which would help reduce its cost. Under current law, capital gains taxes are owed only on the difference between the value of an asset at the time it was inherited and when it is sold.

The House bill would change that, calculating the capital gain of an inherited asset by comparing its value at the time of sale to its value when the individual who died acquired it--often many years earlier. That would mean an heir could face much larger capital gains taxes when the asset is sold.

The bill would, however, exempt assets up to $1.3 million for any heir--and up to $4.3 million for a surviving spouse.

Thursday, March 29, 2001

Research indicates that profile of U.S. single mom is changing

A story released today by Reuters Health reports that about one third of US children are born out-of-wedlock, but the make up of this new American family is different from the common public perception, researchers report.

National statistics indicate that only a minority of these births are to teenage mothers, and that many single mothers are living with their babies' fathers.

In 1970, only 11% of children were born outside marriage, and half of these births were to teenage mothers. By 1999, one in every three American children were born to single parents, with teen moms accounting for fewer than 30% of these births, reports Child Trends, a Washington, DC-based, non-profit research center.

Using data gathered from the National Center for Health Statistics, Elizabeth Terry-Humen and her colleagues determined that out-of-wedlock births in the US grew rapidly during the 1970s and 1980s, then plateaued between 1994 and 1999.

The researchers also found that in 1999, women in their early 20's had the highest rate of births outside of marriage. And more than one third of out-of-wedlock births were to women older than 25. Additionally, the number of children born to parents who are living together is has steadily increased. By 1994, 39% of out-of-wedlock births were to cohabiting couples--up from 29% a decade earlier.

Another popular perception misconstrued by actual statistics, according to the authors, is that out-of-wedlock births are a "racial and ethnic minority issue." For instance, while the nonmarital birth rate remains higher among black women compared with white women, the rate has more than doubled among whites since 1970, but declined by one quarter among blacks, the report indicates.

"The increase in childbearing outside of marriage reflects a reduction in the likelihood of marriage at all ages," according to Terry-Humen and her colleagues. The researchers noted that the slow-down in out-of-wedlock births in the 1990s may be related to economic growth, advances in contraception, welfare reforms targeting births to single parents, and increased concern over HIV and other sexually transmitted diseases.

The researchers also point out that although the typical single mother has changed since 1970, statistics still indicate  unmarried mothers are more likely to have low incomes, and their children face a higher risk for poor school performance and for having children outside of marriage themselves.

House tax cuts at a glance

A story released today by the Associated Press reports the elements of the10-year, $399 billion legislation that passed the House to reduce the marriage penalty and increase the child tax credit and details of a bill approved by the House Ways and Means Committee that would gradually eliminate the estate tax at a cost of $193 billion over 10 years.

On marriage penalty, the report notes that beginning 2002, the standard deduction for married couples would be raised so that it is equal to twice that of single taxpayers. If in effect this year, the deduction would be $9,100 instead of $7,600 for a married couple. The families with two children who claim the earned income tax credit would get up to $401 more. Those with one child could get an additional $246. The maximum income level for those claiming the credit is $32,121.

From 2004 to 2009, the bottom 15 percent tax bracket would be widened so it applies to more of a married couple's income, equal to twice that of singles. If enacted this year, the 15 percent bracket would apply to $54,100 of a couple's income, instead of $45,200 under current law.

Rules would be modified to prevent the tax cuts from forcing more couples to pay the alternative minimum tax.

On child credit, the report indicated that the $500 child tax credit would rise to $600 retroactive to 2001, meaning taxpayers could claim the higher credit on tax returns if they file by April 2002. The $600 credit would also apply in 2002. The credit would also increase to $700 in 2003, $800 in 2004, $900 in 2005 and $1,000 in 2006 and later years.

On estate tax, the story stated that taxes would be reduced beginning in 2002 and repealed fully by 2011. Once completely repealed, inherited assets would carry forward the value, or basis, they had when the individual who died acquired them. Their heirs would owe capital gains taxes on that increase in value if the assets are sold. Under current law, the asset's basis begins for the heir when the individual dies.

The new rules regarding basis would not apply to the first $1.3 million of gain, or to the first $4.3 million in gain if the heir is a surviving spouse.

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