 Income Tax ReformUnder the tax bill sponsored by President George W. Bush
(S-35), everyone who pays income taxes will get some relief, regardless of marital status
or family status.
The plan's primary feature is to reduce
personal income tax rates and combine five current tiers of rates into four. Today's rates
are 39.6 percent, 36 percent, 31 percent, 28 percent and 15 percent. New rates would drop
to 33 percent, 25 percent, 15 percent and 10 percent.
The bottom 10 percent rate, which applies to at least some
of the money of all earners, would affect the first $6,000 of taxable income for singles,
the first $10,000 for single parents, and the first $12,000 for married couples.
The $500 per child tax credit would double to $1,000. The
extra savings would be exempted from calculations used to determine whether families must
pay the alternative minimum tax. The credit now phases out at $75,000 for single parents
and $110,000 for couples; it would instead phase out at $200,000 for both.
Therefore, under the Bush plan, unmarried taxpayers
without children, as well as those with children, will save on their income tax bills,
some more than others.
Death Tax Reform
Under the Bush plan, the estate tax would
be eliminated. Currently, it is levied when a person dies and transfers an estate worth at
least $675,000, an amount that will rise to $1 million in 2006. However, current law does
not impose tax when assets are left to a surviving spouse. In contrast, transfers from a
single parent to a child or from a domestic partner to his or her survivor are taxed.
The Bush plan would repeal the estate tax and the gift tax
for gifts made and decedents dying after 2008. Until then, each of the estate and gift tax
rates would drop by 5 percentage points for 2002 and 2003, 10 percentage points for 2004,
15 percentage points for 2005, 20 percentage points for 2006, 30 percentage points for
2007, and 40 percentage points for 2008. So, for example, for estates of decedents dying
in 2006, the current 37% estate tax rate would drop to 17% and the 55% rate would drop to
35%. After 2008, there would be no estate or gift tax.
Repeal of the so-called "death tax" would put
asset transfers to unmarried people on the same par with transfers to surviving spouses
because there would be no tax. Since this would help gays and lesbians who cannot legally
marry, both the Log Cabin Republicans and the National Stonewall Democratic Federation
support repeal of the death tax.
Whatever your other politics are on this issue
may be, the current system perpetuates marital status discrimination, and gives
preferential treatment to spouses over all other relationships, including parent-child,
siblings, or domestic partners. |
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Social Security Tax Reform During the presidential campaign, George W. Bush proposed
that the social security benefits fund be partially privatized. He wants younger workers
to be able to take a small portion of the employment taxes now deducted from their
paychecks and be allowed to invest them in private accounts which they would own.
This may have considerable appeal to unmarried
workers who are currently cheated by the current program because they pay the same taxes
as married workers but receive fewer benefits in the long run.
According to a Rand Corporation study, since most
African-American adults are unmarried and because their life span is shorter overall,
whites consistently earn higher rates of return than do blacks. Over a lifetime, the
income transfer from blacks to whites is as much as $10,000.
Rand says that an unmarried, low-income
black male born after 1959 will now get a negative rate of return on what he puts into
Social Security. If he could privately invest that money, he’d gain nearly $100,000
over what he put in. He could then use it as he wishes, including passing it on to his
heirs. It wouldn’t disappear when he dies.
Democrats Target "Working Families"
Some Democrats, such as Senator Joe Lieberman
favor "marriage neutrality" in the tax codes. But other Democratic leaders in
Congress have taken a different approach. They want tax relief that is targeted to
"working families."
That is why the primary Democratic tax
reform bill in the Senate (S-9) is entitled the "Working Family Tax Relief Act of
2001". Why not the "Working People Tax Relief Act?"
And a bill (S-8) of Senate Democrats to increase the
minimum wage is called the "Enhancing Economic Security for America's Working
Families Act". Since most minimum wage earners are single, why all the focus on
"working families" in a bill to raise the minimum wage?
With 44% of Democrats being unmarried, and with many of
them being single workers without children, it seems odd that Democratic leaders in
Congress would ignore unmarried taxpayers. One would think that the Democratic Party would
have learned to broaden its outreach and its message considering that Al Gore’s
campaign strategy of focusing exclusively on "working families" to the exclusion
of single and unmarried voters did not win him the presidency. |