H.R. 6 - Marriage Tax Penalty Relief Act of 2000
(Weller (R) Illinois and 236 cosponsors)

Last week, the President and the bipartisan Congressional leadership expressed a common interest in working together to pay down the debt, strengthen Social Security and Medicare, provide tax relief to middle-income families, and fund critical initiatives. Achieving these objectives is central to the continued strength of our national economy. As the President's budget makes clear, the Administration supports targeted marriage penalty relief. But marriage penalty relief needs to be done in the right way, at the right time, and in the right framework. Proceeding on one expensive part of the legislative agenda before the others are even defined simply does not make sound fiscal policy.

The marriage penalty relief provided by H.R. 6 is poorly targeted, expensive, and would add additional complexity to the tax code by causing millions of taxpayers to be subject to the Alternative Minimum Tax ("AMT"). In part because of poor targeting, the total cost of the proposal would be more than $173 billion over 10 years. Moreover, the phased-in raising of the 15-percent bracket for joint filers, which accounts for more than sixty percent of the total cost of H.R. 6, would provide no tax relief for seventy percent of all married couples. Finally, Treasury estimates that, by 2010, H.R. 6 would increase the number of couples subject to the AMT by over 8 million. In contrast, the President's Budget would provide marriage penalty relief in a targeted, progressive, and fiscally responsible manner.

The Administration applauds the Democratic position that addresses a number of policy concerns, including progressivity, complexity, and cost, and recognizes the large tax cut should not take effect before action on a number of other priorities such as Social Security, Medicare, and debt reduction.

Pay-As-You-Go Scoring

H.R. 6 would affect receipts; therefore, it is subject to the pay-as-you-go requirements of the Omnibus Budget Reconciliation Act of 1990. The Administration has not yet completed its scoring of the bill, but it is evident that the magnitude of the proposed tax cut ($2.8 billion in FY 2001, according to the Treasury Department) and the absence of any offsets could cause a significant sequester of Federal resources.