Senate Panel OKs Marriage Tax Relief Bill

WASHINGTON —  Millions of married couples would get $248 billion in tax cuts over 10 years under Republican legislation approved Thursday by the Senate Finance Committee.

“Not only does it reduce families’ tax burden, it eliminates some of the most egregious examples of unfairness and complexity in the tax code today,” said the panel’s chairman, William V. Roth Jr. (R-Del.). “This bill is fair, this bill is responsible and this bill is pro-family.”

The 25 million married couples who pay higher taxes than if they were single are included in those who would get tax cuts.

The bill, much broader than a 10-year, $182-billion House-passed version, is expected to reach the Senate floor by mid-April.

President Clinton has already threatened to veto the House version because it would consume too much of the projected budget surplus, and Democrats said the same fate would befall the Senate bill.

“It will not be signed into law,” said Sen. Daniel Patrick Moynihan (D-N.Y.). “We surely support the principle. We have serious reservations about the costs involved.”

But the Finance Committee approved the measure on an 11-9 party-line vote, including a change from the original version sought by GOP conservatives that would gradually adjust the 28% tax rate so it applies to more of a married couple’s income. The bill would do the same thing to the 15% bracket, as would the House version.

Under current law, two people who are married and have roughly equal incomes pay income taxes at higher rates in both the 15% and 28% brackets than they would if they were single. However, millions of married couples now get a bonus when one spouse earns most of the income.

Democrats said the GOP bill is too broad because it cuts income taxes for couples in both groups--more than half the bill’s relief would go to couples who already get bonuses--rather than focusing solely on those who pay a marriage penalty.

But Republicans countered that all families deserve help, given the size of the projected budget surplus.

The Senate bill also would raise the income cutoff by $2,500 for lower-income couples who claim the earned income tax credit, up from $2,000 in the original bill and the House measure. This change was suggested by Sen. James M. Jeffords (R-Vt.).

In addition, it would gradually raise the standard deduction for married couples to twice that of single filers and permanently ensure that taxpayers who claim middle-class credits do not become ensnared in the alternative minimum tax.