What: All Issues : Fair Taxation : A House Vote on passage of a Democratic substitute to a Republican-drafted measure (HR 4181) designed to eliminate the "marriage penalty" contained in federal tax law by amending the Internal Revenue Code to permanently extend the increased standard tax deduction for married taxpayers filing joint returns. (2004 house Roll Call 136)
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A House Vote on passage of a Democratic substitute to a Republican-drafted measure (HR 4181) designed to eliminate the "marriage penalty" contained in federal tax law by amending the Internal Revenue Code to permanently extend the increased standard tax deduction for married taxpayers filing joint returns.
house Roll Call 136     Apr 28, 2004
Progressive Position:
Yea
Progressive Result:
Loss

Conservatives helped defeat a substitute bill, offered by House Ways and Means ranking member Charles Rangel (D-N.Y.) to a Republican-drafted measure (HR 4181) designed to eliminate the "marriage penalty", with the final vote being 189-226 to defeat the progressive-backed alternative. In the 1960s, Congress changed the tax laws to relieve what was perceived as an unfair tax burden on single taxpayers. Now, lawmakers are attempting to provide relief for married taxpayers, who often pay more than their single counterparts. Not all married taxpayers suffer under current law, however. About half of all joint filers receive a marriage bonus, paying less than if they were single. The Congressional Budget Office has found that spouses who earn roughly equal incomes are the most vulnerable to paying more, while couples in which one spouse earns most of the income have a smaller joint tax liability than what the sum of the two would be if they were single. What Rangel's proposed substitute bill would have done, among other things, was nullified the effect of the alternative minimum tax (AMT) on tax breaks for married couples. The AMT was created under President Nixon to prevent wealthy Americans and big corporations from using legitimate tax breaks to avoid paying income taxes altogether. But because the AMT was never indexed for inflation, it currently sweeps in many middle class families, offsetting many of their legitimate tax exemptions. The Rangel substitute's $207 billion cost would have been offset with a surtax on individuals annually earning more than $500,000 and couples earning more than $1 million. However, conservatives criticized Rangel's offer, which Rep. Jerry Weller (R-Ill.) said amounts to "a $207 billion tax increase on individuals, on families, and on small business." Progressives retorted that the Republican Marriage Penalty bill is being used by conservatives for political posturing - especially given the Senate's opposition to HR 4181 and the resulting likelihood it would therefore not become law. Progressives also argued that the substance of the Republican legislation is neither realistic nor serves a true purpose in its current form. According to progressives, this legislation would leave middle class married couples in the cold when it comes to tax relief. And they noted it has "no legitimate offsets" to pay for its expense - an "irresponsible" move that will only grow the deficit and make greater the burden on average Americans, progressives said. By contrast, progressives claimed, the Rangel substitute offers a "responsible" way to extend relief from the marriage penalty by paying for the measure by closing tax loopholes. However, conservatives stood by their assertion that tax cuts lead to economic recovery, and argued that "under the guise" of individual tax relief from the alternative minimum tax, or AMT, the Rangel substitute would raise taxes by $15 billion. This new tax increase would fall squarely on the shoulders of America's small businesses, conservatives asserted, which would negatively affect the same American companies that create jobs and drive our nation's economic engine. The defeat of Rangel's substitute effectively served to kill off any further attempts by progressives to ensure that new tax breaks for married couples under HR 4181 would be paid for via revenue raising measures or tax increases elsewhere.

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