Friday, January 10, 2003

A story released today by the Associated Press reports that Sen. Kay Bailey Hutchison introduced a bill Thursday to permanently eliminate the "marriage penalty," which imposes higher income taxes on many married, two-income couples.

The Texas Republican also hopes to remove the penalty immediately, instead of phasing in relief from 2005 to 2010 under a law passed in 2001, also under Hutchison's leadership.

"It's simply wrong for the government to tax couples for saying, 'I do,' " Hutchison said. "Forty-eight percent of married couples pay a marriage penalty."

Tax code quirks force 35 million two-income married couples to pay higher tax bills --- $574 on average --- than if they were single.

The Bush economic plan, unveiled Tuesday, does not call for a permanent end to the marriage penalty, but the president favors Hutchison's goal, the White House said Thursday.

One Democrat, Sen. Evan Bayh of Indiana, co-sponsored the bill with Hutchison and four other Republicans. "I hope we will be able to garner bipartisan support for this proposal," he said. "It's good for the economy, it's good for American families."

The bill includes no spending cuts or tax adjustments to make up for its $100 billion cost, but Hutchison and Bayh said they expected families to spend most of their additional money, boosting the economy and therefore government tax revenue.

"I think this is a surefire way to put money in peoples' pockets. We're talking about a good sum of money," Hutchison said.

The bill would:

* Raise the standard deduction to $9,500 per couple --- double the standard deduction for single people. Couples currently receive a $7,950 deduction.

* Eliminate sunset provisions in the 2001 bill that would reinstate the marriage penalty in 2011.

* Help more low-income families qualify for the earned income tax credit, which Bayh called an improvement over the president's proposal. "It would end the cruel contradiction where we encourage poor individuals to be self-sufficient economically [but] at the same time penalize them if they get married," he said.

Bush, meanwhile, defended his tax-cutting plan against Democratic-led charges that he was favoring the rich.

Bush decried "the class war of politics" even as a Republican senator voiced opposition.

"It's a fair plan," Bush said during a stop at a flag-making company in a Virginia suburb of Washington. "It's an important plan, and it's a plan that will help people find work."

However, Republican Sen. Lincoln Chafee of Rhode Island announced his opposition to the Bush plan. "I can't see giving away any more of our revenues, which we're doing in tax cuts," Chafee said during a Capitol news conference. He voted against last year's tax cuts.