July 20,2000

Roth: Let's Divorce the Marriage Tax Penalty from the Tax Code Once and For All

WASHINGTON -- The Senate this evening opened debate on the House-Senate Conference Report on H.R. 4810, the Marriage Tax Relief Reconciliation Act of 2000. The Senate is expected to vote Friday on the Conference Report. Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) delivered the following statement on the floor:

"Mr. President, tomorrow this Senate will approve the Marriage Tax Relief Reconciliation Act of 2000. This is a great victory for the American family - all America's families. It is not one that has been won for America's families, as much as it has been earned by America's families.

"This bill is the centerpiece of our efforts to reduce the tax overpayment by American taxpayers. It is fair, it is responsible, it is the right thing to do for American families. And it is long overdue that they receive it.

"The provisions in this bill will help 45 million families. That is substantially every family in the U.S. Some of my colleagues have argued that almost half of those families -- 21 million families located in every state in this country -- do not deserve any tax relief. I reject that. I reject it because in my home state of Delaware it would mean leaving over 30,000 families that contributed to our ever-growing budget surplus out of family tax relief.

"Why should the family in which one spouse stays home to raise the children and keep the house not receive a tax break? Does that spouse not work? Do you imagine that spouse doesn't work just because she or he does not get paid? Does that family not count? They do in Delaware, they do in this country, and they do in this bill.

"All of these American families have contributed to the record surplus that we have in Washington. They deserve to get some of it back. I believed that three months ago when I first unveiled this package. And I believe it even more so now in light of estimates recently released by the Congressional Budget Office.

"Today's bill amounts to less than 5 percent of the total budget surplus over the next five years. That is less than a nickel on the dollar of our total budget surplus. It amounts to just 9 percent of the total non-Social Security surplus over the next five years. That is less than a dime on the dollar of the non-Social Security surplus. A nickel and a dime. By any comparison or estimation, this marriage tax relief is fiscally responsible. Those who dispute that are themselves seeking to 'nickel-and-dime' America's families out of tax relief.

I would ask those who oppose this family tax relief: just how big will America's budget surplus have to get before America's families deserve to receive some of their tax dollars back? If not now, when? If just 5 percent of the budget surplus and just 9 percent of the tax overpayment is too big a refund, how little should it be? How long do they have to wait? How hard do they have to work? How large an overpayment do they have to make? How large a budget surplus do we need to have?

"This bill is fair. We have addressed the three largest sources of marriage tax penalties in the tax code - the standard deduction, the rate brackets, and the earned income credit. And we have done so in a way that does not create any new penalties - any new disincentives in the tax code. We have ensured that a family with one stay-at-home parent is not treated worse for tax purposes than a family where both parents work outside the home. This is an important principle because these are important families.

"Let's take a look at what all these families will receive under our bill -- and just as importantly, let's look at when they will get it. First, our bill increases the standard deduction for married couples filing a joint return to twice the deduction for singles.

"This benefit, which would reduce a couple's taxable income by $1,450, is effective for this taxable year. That's right -- for the year 2000. That means when a couple files their tax returns this coming April, they will be able to see and feel the results of our work. This provision will benefit about 25 million taxpayers. As a result, I believe that we should call this bill the ASAP tax relief bill for America's taxpayers - tax relief for America's families now.

"Now, I know that those who search for excuses to oppose tax relief will question the immediacy of this tax cut. Before they do, I would remind those people: it was not a problem for them to raise taxes retroactively seven years ago. And of course, when you are raising taxes retroactively, it is a big problem because people have already made their financial commitments. In contrast, giving people an immediate tax cut is only a problem if you object to letting people keep their money.

"Second, our bill increases the 15% rate bracket for married couples so that it is twice the of the corresponding rate bracket for singles. While we phase in this doubling, we begin the increase immediately. Taxpayers will receive a portion of the benefit as soon as possible - as soon as they file their year 2000 tax returns. And they will see the entire benefit -- a total of over $1,100 per family -- in the year 2004. This provision will help about 21 million taxpayers.

"Third, our bill helps married couples who are receiving the earned income credit. We increase the beginning and ending points of the credit's income phase-out for these couples by $2,000. Just like the other provisions in the bill, we deliver this relief immediately -- for the tax year 2000. The hard working families who receive the EIC will see the benefit as soon as they file their year 2000 tax returns. This provision helps almost four million families, including an expansion of the EIC to one million families who were previously ineligible for the credit because of their combined income.

"Finally, our bill ensures that families will continue to receive their family tax credits. Congress has delivered a variety of tax credits to American families -- credits like the child credit, the HOPE credit, the Lifetime Learning credit, the dependent care credit, and the adoption credit. This bill extends a temporary provision that carves out these credits from the ever-reaching grasp of the alternative minimum tax. Millions of families will also see this benefit. For them, this tax relief won't be an empty promise.

"In any House-Senate conference, both sides are forced to make compromises. This one was no exception. I would like to have included the doubling of the 28 percent bracket as we did in the Senate and as 61 Senators supported. I think that these families deserve their full tax break as well. Even the Democratic alternative offered in the Senate accounted for these families by not completely phasing-out their relief until $150,000. I fought hard, but our colleagues in the House did not agree and they refused to budge. I also would have liked to keep our earned income credit provision at $2,500. Once again, the House disagreed. But this is still a good bill and it still delivers the tax relief families have earned and deserve.

"Mr. President, despite the red flags thrown up by those who want to stand in the way of marriage tax relief, this bill actually makes the tax code more progressive. Families with incomes under $100,000 receive a tax cut under our bill that is proportionally higher than the amount of taxes they currently pay. In other words, their tax burden will fall.

"Let's look at a few examples prepared by the Joint Committee on Taxation. First, let's take a married couple with two children earning $30,000. When this bill is fully effective, that couple would see a reduction in its taxes of over 143 percent. On the other hand, a two-child couple earning $100,000 would see its taxes drop by 11 percent, and a couple earning $200,000 would see its taxes drop by less than 4 percent.

"This same dynamic holds true for a couple with no children. Under our bill, a couple earning $20,000 would see its taxes reduced by 28 percent; a couple earning $75,000 would have its taxes reduced by 16 percent, and a couple earning $100,000 would have its taxes reduced by 9.5 percent.

"There is no honest way people can claim that this bill is tilted towards the rich. I believe that the real complaint of those who oppose this bill is not that it is tilted towards the rich - because it is not - but because it is tilted away from Washington. As a result, some of America's tax overpayment will flow back to America's families.

"And while I would rather have seen the 28 percent bracket doubling included in the bill, its absence does do one thing. Its absence removes any excuse for the President not to sign this bill. If President Clinton does not sign this bill, then there is only one explanation. No matter how much the amount of surplus, no matter how much the of the tax overpayment, no matter how high the overall tax burden, and no matter how much families deserve tax relief, it is all less important than the fact that Washington wants the money more. They are saying to America: those in the White House need your money more than the people in your house do.

"With the passage of this bill, Congress has met every test that the President has set for tax relief. He wanted it to go to deserving people. Who could be more deserving than America's families? He wanted it to be fiscally responsible. What could be more fiscally responsible than using just a nickel on America's budget surplus dollar and a dime on its tax overpayment? He wanted it to be one provision and not part of a large package. How could it be smaller than the single proposal of family tax relief included here?

"Every test, no matter how illusory, has been met. With this bill, President Clinton has run out of excuses for not giving American families tax relief. No more 'if's,' 'and's,' or 'buts.' No more excuses. No more obstacles and no more conditions, this Senate will go on record tomorrow: Family tax relief now.

"Mr. President, the time for excuses has passed, the time for family tax relief has come. While President Clinton has been focused on international affairs, families across America have been waiting for us to make good on our promise. For President Clinton to make good on his promise. They have been patient. They are waiting for us to return some of this record surplus to them.

"There is no reason, none whatsoever, that this bill, the 'ASAP tax relief bill' for America's family taxpayers, should not be immediately signed. Let's approve the Marriage Tax Relief Reconciliation Act of 2000 and let's divorce the marriage tax penalty from the tax code once and for all."