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July 13, 2000

ABERCROMBIE VOTES TO ABOLISH MARRIAGE PENALTY

Congressman Neil Abercrombie voted last night to eliminate the "marriage penalty" provision of the federal tax code which causes some married couples to pay higher taxes than they would if they were single.

Abercrombie’s action came with his vote for the Democratic substitute to the Republican-sponsored H.R. 4810. He opposed the flawed Republican bill, because it fails to extend full marriage penalty relief to working families.

"I voted to abolish the marriage penalty, because so many Hawaii families need two incomes just to make ends meet," said Abercrombie. "It’s unfortunate that Republicans in Congress botched this opportunity to eliminate the marriage penalty by insisting on a defective bill. The straightforward Democratic approach works better. It’s simpler, fairer, and applies equally to everyone. The Democratic substitute extends benefits fully and equally to all income levels, while the Republican bill tilts the playing field against low and middle income families."

Not all couples are affected equally by the marriage penalty. Those who pay the penalty are couples where both spouses earn roughly similar incomes. For others, however, the penalty becomes a "marriage bonus", because their taxes are less than if the spouses filed separately. Those who enjoy the bonus are, for the most part, couples with wide differences in the income levels of the two spouses. According to the U.S. Treasury Department, about 48 percent of couples pay a marriage penalty and 42 percent receive a marriage bonus.

The Democratic bill addresses the marriage penalty by simply making the standard deduction for married couples twice as much as the deduction for single taxpayers.

The Republican bill increases the marriage bonus for unequal-income couples and denies marriage penalty relief to many middle income families by subjecting them to provisions of the Alternative Minimum Tax.

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