I

106TH CONGRESS

2D SESSION H. R. 5170

To amend the Internal Revenue Code of 1986 to reduce the marriage penalty

by providing for adjustments to the standard deduction and the earned

income credit and to repeal the reduction of the refundable tax credits.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 13, 2000

Ms. MILLENDER-MCDONALD introduced the following bill; which was referred

to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to reduce

the marriage penalty by providing for adjustments to

the standard deduction and the earned income credit

and to repeal the reduction of the refundable tax credits.

1 Be it enacted by the Senate and House of Representa2 tive of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Common Sense Mar5 riage Tax Relief Act of 2000’’.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:
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1 (1) According to a 1999 Department of the

2 Treasury study, of the 51,400,000 joint returns filed

3 in 1999, approximately—

4 (A) 48 percent will incur a marriage tax

5 penalty,

6 (B) 41 percent will incur a marriage tax

7 bonus, and

8 (C) 11 percent will generally be unaffected.

9 (2) The average marriage tax penalty in 1999

10 will reach $1,141 per couple, according to the De11 partment of the Treasury study.

12 (3) At least 66 provisions in the existing tax

13 code treat married couples differently from single fil14 ers, according to the American Institute of Certified

15 Public Accountants.

16 (4) Married working women, on average, earn

17 approximately 60 percent of their husband’s salary,

18 according to the Bureau of the Census. The wage

19 gap between women and men is 73 percent for Cau20 casian women, 63 percent for African-American

21 women, and 53 percent for Hispanic women, accord22 ing to the National Committee on Pay Equity.

23 (5) Approximately 40 percent of married moth24 ers in the United States stay at home to raise their
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1 young children full time while almost no fathers do,

2 according to the Bureau of the Census.

3 (6) Although the United States tax code is neu4 tral, it is biased against secondary earners, who are

5 overwhelmingly women.

6 (7) Because of the progressive marginal rates in

7 the tax code, one spouse earning $25,000 per year

8 would be taxed entirely at the 15 percent rate; but

9 if the other spouse also earns $25,000, a portion of

10 the other spouse’s income would be taxed at the 28

11 percent rate.

12 (8) Regardless of marital status, once an indi13 vidual’s reported income level reaches beyond the

14 earned income tax credit threshold, she or he auto15 matically loses this benefit. As a result, newly mar16 ried couples struggling to escape poverty suddenly

17 lose this vital tax benefit simply because they are no

18 longer single.

19 SEC. 3. MARRIAGE PENALTY RELIEF.

20 (a) STANDARD DEDUCTION.—

21 (1) IN GENERAL.—Paragraph (2) of section

22 63(c) of the Internal Revenue Code of 1986 (relat23 ing to standard deduction) is amended—

24 (A) by striking ‘‘$5,000’’ in subparagraph

25 (A) and inserting ‘‘twice the dollar amount in
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1 effect under subparagraph (C) for the taxable

2 year’’,

3 (B) by adding ‘‘or’’ at the end of subpara4 graph (B),

5 (C) by striking ‘‘in the case of’’ and all

6 that follows in subparagraph (C) and inserting

7 ‘‘in any other case.’’, and

8 (D) by striking subparagraph (D).

9 (2) INCREASE ALLOWED AS DEDUCTION IN DE10 TERMINING MINIMUM TAX.—Subparagraph (E) of

11 section 56(b)(1) of such Code is amended by adding

12 at the end the following new sentence: ‘‘The pre13 ceding sentence shall not apply to so much of the

14 standard deduction under subparagraph (A) of sec15 tion 63(c)(2) as exceeds the amount which would be

16 such deduction but for the amendment made by sec17 tion 2(a)(1) of the Penalty Relief From Marriage

18 Tax Act of 2000.’’

19 (3) TECHNICAL AMENDMENTS.—

20 (A) Subparagraph (B) of section 1(f)(6) of

21 such Code is amended by striking ‘‘(other than

22 with’’ and all that follows through ‘‘shall be ap23 plied’’ and inserting ‘‘(other than with respect

24 to sections 63(c)(4) and 151(d)(4)(A)) shall be

25 applied’’.
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1 (B) Paragraph (4) of section 63(c) of such

2 Code is amended by adding at the end the fol3 lowing flush sentence:

4 ‘‘The preceding sentence shall not apply to the

5 amount referred to in paragraph (2)(A).’’

6 (b) EARNED INCOME CREDIT.—

7 (1) IN GENERAL.—Subsection (a) of section 32

8 of such Code (relating to credit for earned income)

9 is amended by adding at the end the following new

10 paragraph:

11 ‘‘(3) REDUCTION OF MARRIAGE PENALTY.—

12 ‘‘(A) IN GENERAL.—In the case of a joint

13 return, the phaseout amount under this section

14 shall be such amount (determined without re15 gard to this paragraph) increased by $2,500

16 ($2,000 in the case of taxable years beginning

17 during 2001).

18 ‘‘(B) INFLATION ADJUSTMENT.—In the

19 case of any taxable year beginning in a calendar

20 year after 2002, the $2,500 amount contained

21 in subparagraph (A) shall be increased by an

22 amount equal to the product of—

23 ‘‘(i) such dollar amount, and

24 ‘‘(ii) the cost-of-living adjustment de25 termined under section 1(f)(3) for the cal-
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1 endar year in which the taxable year be2 gins, determined by substituting ‘calendar

3 year 2001’ for ‘calendar year 1992’ in sub4 paragraph (B) thereof.

5 If any increase determined under the preceding

6 sentence is not a multiple of $50, such increase

7 shall be rounded to the next lowest multiple of

8 $50.’’

9 (2) REPEAL OF REDUCTION OF REFUNDABLE

10 TAX CREDITS.—

11 (A) Subsection (d) of section 24 of such

12 Code is amended by striking paragraph (2) and

13 redesignating paragraph (3) as paragraph (2).

14 (B) Section 32 of such Code is amended by

15 striking subsection (h).

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to taxable years beginning after

18 December 31, 2000.

19 SEC. 4. TAX REDUCTIONS CONTINGENT ON SOCIAL SECU20 RITY AND MEDICARE SOLVENCY CERTIFI21 CATIONS.

22 (a) IN GENERAL.—Notwithstanding any other provi23 sion of this Act, no provision of this Act (or amendment

24 made thereby) shall take effect until there is—

25 (1) a social security certification,
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1 (2) a medicare certification, and

2 (3) a public debt elimination certification.

3 (b) DEFINITIONS.—For purposes of this

4 subsection—

5 (1) SOCIAL SECURITY SOLVENCY CERTIFI6 CATION.—The term ‘‘social security solvency certifi7 cation’’ means a certification by the Board of Trust8 ees of the Social Security Trust Funds that the Fed9 eral Old-Age and Survivors Insurance Trust Fund

10 and the Federal Disability Insurance Trust Fund

11 are in actuarial balance until the year 2050.

12 (2) MEDICARE SOLVENCY CERTIFICATION.—

13 The term ‘‘medicare solvency certification’’ means a

14 certification by the Board of Trustees of the Federal

15 Hospital Insurance Trust Fund that such Trust

16 Fund is in actuarial balance until the year 2030.

17 (3) PUBLIC DEBT ELIMINATION CERTIFI18 CATION.—There is a public debt elimination certifi19 cation if the Director of the Office of Management

20 and Budget certifies that, taking into account the

21 tax reductions made by this Act and other legislation

22 enacted during calendar year 2000, the national

23 debt held by the public is projected to be eliminated

24 by the year 2013.

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