House Votes to End ‘Marriage Penalty’

The House Wednesday overwhelmingly approved tax relief for married couples for the second time this year, as a renewed Republican drive to cut taxes this year appeared to gain momentum.

By a vote of 269 to 159, the House agreed to slash taxes on married couples by $182.3 billion over 10 years. The GOP-sponsored plan would increase the standard deduction for married people to twice that of single taxpayers, expand the 15% tax bracket to include more couples and slightly boost the earned-income tax credit for couples.

Forty-eight Democrats joined 220 Republicans to pass the bill--roughly a replay of the vote in February when the House first took up the legislation. This time, the House acted under special rules designed to help the Senate overcome Democratic delaying tactics when that chamber takes up its costlier version of the bill later this week.

GOP leaders predicted that a final version will clear Congress and be sent to President Clinton well before the July 31 opening of the Republican National Convention.

Meanwhile, Senate Majority Leader Trent Lott (R-Miss.) struck a deal with Democrats on Wednesday that greatly enhanced the prospects for passage by the end of the week of another House-passed bill, one that would gradually repeal the federal estate tax.

Although many Democrats as well as Republicans favor major reductions in or elimination of the estate tax, Senate Minority Leader Tom Daschle (D-S.D.) threatened a filibuster unless Democrats were given votes on their alternative and a series of amendments highlighting Democratic priorities.

With Congress now moving toward completion of action on the Republicans’ two marquee tax bills in a tough election year, the administration and Vice President Al Gore’s presidential campaign soon must decide how to respond.

The White House has criticized both the marriage tax bill and the estate tax legislation, warning of vetoes unless Republicans scale back the size and scope of the proposals to leave more of the growing budget surplus for other priorities. However, Clinton recently announced that he would agree to a $250-billion, 10-year tax cut for married couples along the lines of the GOP plan if Congress would pass his plan for a new Medicare prescription drug benefit for seniors at a comparable cost.

Although Wednesday’s House action was largely pro forma, it highlighted congressional determination to eliminate the “marriage penalty,” a quirk in the tax code that leaves millions of two-income couples paying a larger tax bill than they would if they were single. But the House and Senate measures go far beyond that, providing substantial tax breaks to all income groups, with upper-income couples gaining the largest benefit.

According to an analysis of the House plan by the liberal-leaning research and advocacy group Citizens for Tax Justice, two-thirds of the annual tax cuts will go to couples making more than $75,000 a year when all of the provisions are in place.