I 

111TH CONGRESS 

2D SESSION H. R. 5574 

To establish the National Commission on Effective Marginal Tax Rates for 

Low-Income Families. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 22, 2010 

Mr. PETRI (for himself, Mr. BURTON of Indiana, Ms. NORTON, and Mr. 

FORBES) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Agriculture, Veterans’ Affairs, Financial Services, Energy and Commerce, and 

Education and Labor, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To establish the National Commission on Effective Marginal 

Tax Rates for Low-Income Families. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Making Work and 

5 Marriage Pay Act of 2010’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) The take-home pay of low-income families is 

2 subject to reductions from many sources, including 

3 the Federal income tax, Social Security payroll 

4 taxes, and State income taxes. In addition, eligibility 

5 for many Federal and State programs for assistance 

6 to the working families, such as the earned income 

7 tax credit, the child tax credit, supplemental nutri8 tional assistance program, housing assistance pro9 grams, Federal and State health care programs, 

10 child care assistance, and temporary assistance to 

11 needy families, is based in part on income levels. 

12 The rates at which the benefits from such programs 

13 are phased out have the same disposable income re14 ducing effect as escalating marginal tax rates. 

15 (2) The total effective marginal rate of tax for 

16 additional income earned by low-income people can 

17 exceed 100 percent and can be a disincentive to 

18 working more hours, getting a raise, seeking edu19 cation toward a more lucrative trade, getting mar20 ried, or engaging in other economic or social activi21 ties. 

22 (3) Congress has enacted each of these pro23 grams without consideration of the impact it would 

24 have on other existing programs. As a result, the 

25 structure of the United States system for the supVerDate Mar 15 2010 05:05 Jun 23, 2010 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5574.IH H5574

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1 port of low-income families is uncoordinated and 

2 contains features which work against the goal of en3 couraging families to work their way toward self-suf4 ficiency. 

5 SEC. 3. DEFINITIONS. 

6 For purposes of this Act: 

7 (1) LOW-INCOME.—The term ‘‘low-income’’ 

8 means, with respect to any individual or family 

9 group, an individual or family group, as the case 

10 may be, whose income is not more than 225 percent 

11 of the poverty line (as defined by the Office of Man12 agement and Budget). 

13 (2) FEDERAL BENEFITS.—The term ‘‘Federal 

14 benefits’’ means— 

15 (A) deductions, credits, and other tax ben16 efits available to low income taxpayers under 

17 the Internal Revenue Code of 1986, including— 

18 (i) the earned income tax credit under 

19 section 32 of such Code, 

20 (ii) the child tax credit under section 

21 24 of such Code, and 

22 (iii) the dependent care tax credit 

23 under section 21 of such Code, and 

24 (B) Federal assistance programs for low25 income individuals and families, including— 


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1 (i) the supplemental nutritional assist2 ance program established under the Food 

3 and Nutrition Act of 2008 (7 U.S.C. 2011 

4 et seq.), 

5 (ii) any assistance, loan, loan guar6 antee, housing, housing assistance, or 

7 other housing related program adminis8 tered, in whole or in part, by the Secretary 

9 of Housing and Urban Development, the 

10 Secretary of Veterans Affairs, or any other 

11 Federal agency housing assistance, includ12 ing the project-based and tenant-based 

13 rental assistance programs under section 8 

14 of the United States Housing Act of 1937, 

15 (iii) any Federal programs providing 

16 child care assistance, and 

17 (iv) Federal programs providing 

18 health care assistance, including assistance 

19 under the Medicaid program established 

20 under title XIX of the Social Security Act 

21 and the State Children’s Health Insurance 

22 Program under title XXI of such Act. 

23 (3) EFFECTIVE MARGINAL TAX RATE.—The 

24 term ‘‘effective marginal tax rate’’ means the cost, 


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1 in terms of both taxes and loss of Federal benefits, 

2 for each dollar earned by a low-income individual. 

3 SEC. 4. NATIONAL COMMISSION ON EFFECTIVE MARGINAL 

4 TAX RATES FOR LOW-INCOME FAMILIES. 

5 (a) ESTABLISHMENT.—There is established a com6 mission to be known as the ‘‘National Commission on Ef7 fective Marginal Tax Rates for Low-Income Families’’ 

8 (hereinafter in this Act referred to as the ‘‘Commission’’). 

9 (b) DUTIES OF COMMISSION.— 

10 (1) IN GENERAL.—The Commission shall study 

11 and make recommendations on policy changes to 

12 mitigate the impact of the effective marginal tax 

13 rate and of phaseouts in Federal benefits on low-in14 come earners and their families. 

15 (2) REPORT.—Not later than 1 year after the 

16 date of the enactment of this Act, the Commission 

17 shall submit to the President and to Congress a re18 port containing the following: 

19 (A) ANALYSIS.—A detailed analysis of the 

20 following: 

21 (i) The Commission’s general rec22 ommendations for increasing coordination 

23 of the delivery of Federal benefits for low24 income families in order to reduce effective 


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1 marginal tax rates and decrease disincen2 tives to work and marriage. 

3 (ii) The relative usefulness of sudden 

4 benefit cutoffs (sometime referred to as 

5 ‘‘cliffs’’) versus gradual reductions (some6 time referred to as ‘‘phaseouts’’) in Fed7 eral benefits on low-income workers’ behav8 ior relating to work and marriage. 

9 (iii) The interaction of Federal bene10 fits and State assistance programs, and 

11 the potential benefits of structuring State 

12 programs consistent with the design of 

13 Federal assistance. 

14 (iv) The maximum extent to which 

15 funding for Federal benefits can be appro16 priated annually avoiding the need to cre17 ate additional entitlement programs. 

18 (v) The extent to which low-income 

19 cohabiting couples (including couples with 

20 children and couples without children) re21 sist entering a legal marriage in order to 

22 maximize Federal benefits and avoid lost 

23 income. 

24 (B) RECOMMENDATIONS.— 


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1 (i) IN GENERAL.—A description of the 

2 Commission’s recommendations relating to 

3 the following: 

4 (I) Combining all Federal bene5 fits which are not tax benefits into a 

6 single flexible voucher, allowing the 

7 beneficiary to allocate funds within 

8 each of the supported benefit areas. 

9 (II) To the extent possible, pro10 viding all eligible families with equal 

11 voucher funds described in clause (i), 

12 varying only for income, family size, 

13 and the presence of children in the 

14 household. 

15 (III) Combining all Federal bene16 fits which are tax benefits for low-in17 come families into a coordinated cred18 it that minimizes phaseouts, encour19 ages work, is adjusted for family size, 

20 and does not penalize marriage. 

21 (IV) Establishing a single eligi22 bility standard for all Federal bene23 fits. 

24 (ii) REVENUE NEUTRALITY.—In mak25 ing recommendations under this subparaVerDate Mar 15 2010 05:05 Jun 23, 2010 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5574.IH H5574

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1 graph, the Commission shall consider the 

2 need to maintain revenue neutrality in 

3 order to avoid increasing the deficit. 

4 (iii) BLUEPRINT FOR LEGISLATION.— 

5 The Commission shall provide a blueprint 

6 for legislative proposals for each policy rec7 ommendation under this subparagraph. 

8 (C) OTHER MATTERS.— 

9 (i) NON-FEASIBILITY.—Should the 

10 Commission conclude that the policy 

11 framework described in subparagraph (B) 

12 is not feasible, the Commission shall in13 clude in its report— 

14 (I) a detailed analysis of such 

15 policy framework, 

16 (II) a comprehensive explanation 

17 of the reasons for its conclusion, and 

18 (III) one or more policy rec19 ommendations addressing the problem 

20 of effective marginal tax rates on low21 income families. 

22 (ii) ADDITIONAL MATTER.—If the 

23 Commission includes in its report a policy 

24 plan using the policy elements described in 

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1 ditional alternative recommendations (to2 gether with a legislative blueprint as pro3 vided under subparagraph (B)(iii)). 

4 (c) MEMBERSHIP AND MEETINGS.— 

5 (1) MEMBERS.—The Commission shall be com6 posed of 15 members, of whom 4 shall be members 

7 described in paragraph (2) and 11 shall be ap8 pointed pursuant to paragraph (3). 

9 (2) CABINET MEMBERS SERVING ON COMMIS10 SION.— 

11 (A) IN GENERAL.—The members described 

12 in this paragraph are the following Secretaries: 

13 (i) The Secretary of the Treasury. 

14 (ii) The Secretary of Agriculture. 

15 (iii) The Secretary of Housing and 

16 Urban Development. 

17 (iv) The Secretary of Health and 

18 Human Services. 

19 (B) NON-VOTING MEMBERS; CHAIRMAN.— 

20 Of the members of the Commission described in 

21 subparagraph (A)— 

22 (i) the 2 members with the least se23 niority in terms of service as Secretary 

24 shall be nonvoting members, and 


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1 (ii) the member with the most senior2 ity in terms of service as Secretary shall be 

3 the chairman. 

4 (3) APPOINTED MEMBERS.— 

5 (A) CONGRESSIONAL APPOINTMENTS.— 

6 The Speaker of the House of Representatives, 

7 the minority leader of the House of Representa8 tives, the majority leader of the Senate, and the 

9 minority leader of the Senate shall each appoint 

10 2 members, who shall each be experts in the 

11 subject matter of the Commission. 

12 (B) GOVERNORS.— 

13 (i) IN GENERAL.—The President shall 

14 appoint 3 State governors, of whom— 

15 (I) no more than 1 shall rep16 resent the same political party rep17 resented by the President, 

18 (II) 1 shall be a governor of a 

19 State which is ranked in the top third 

20 on the list of benefit providers estab21 lished under clause (ii), 

22 (III) 1 shall be a governor of a 

23 State which is ranked in the middle 

24 third on the list of benefit providers 

25 established under clause (ii), and 


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1 (IV) at least 1 shall be a gov2 ernor of a State which is ranked in 

3 the lowest third on the list of benefit 

4 providers established under clause (ii). 

5 (ii) RANKING OF STATES.—The mem6 bers of the Commission described in para7 graph (2)(A) shall establish a list ranking 

8 of States from highest benefit providers to 

9 lowest benefit providers based on the fol10 lowing: 

11 (I) The level of benefits provided 

12 in the State under the Temporary As13 sistance to Needy Families under title 

14 IV of the Social Security Act. 

15 (II) The average fair-market 

16 value of rental housing in the State. 

17 (III) The State share of assist18 ance provided under a State plan 

19 under the Medicaid program under 

20 title XIX of the Social Security Act 

21 and a State child health plan under 

22 the State Children’s Health Insurance 

23 Program under title XXI of such Act. 

24 (C) DATE FOR ORIGINAL APPOINTMENT.— 

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1 graph (1) shall appoint the initial members of 

2 the Commission not later than 30 days after 

3 the date of enactment of this Act. 

4 (D) TERMS OF APPOINTMENT.—The term 

5 of any appointment shall be for the life of the 

6 Commission. 

7 (4) DESIGNEES.—A member of the Commission 

8 serving under paragraph (2) or appointed under 

9 paragraph (2)(B) may appoint a designee to serve 

10 on the Commission in such member’s place. 

11 (5) MEETINGS.—The chairman shall call the 

12 first meeting of the Commission. Thereafter, the 

13 Commission shall meet at the call of its chairman or 

14 a majority of its members. 

15 (6) QUORUM.—A quorum shall consist of 9 vot16 ing members of the Commission. 

17 (7) VACANCIES.—A vacancy on the Commission 

18 shall be filled in the same manner in which the origi19 nal appointment was made, not later than 30 days 

20 after the Commission is given notice of the vacancy, 

21 and shall not affect the power of the remaining 

22 members to execute the duties of the Commission. 

23 (8) COMPENSATION.—Members of the Commis24 sion shall receive no additional pay, allowances, or 


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1 benefits by reason of their service on the Commis2 sion. 

3 (9) EXPENSES.—Each member of the Commis4 sion shall receive travel expenses and per diem in 

5 lieu of subsistence in accordance with sections 5702 

6 and 5703 of title 5, United States Code. 

7 (d) STAFF AND SUPPORT SERVICES.— 

8 (1) EXECUTIVE DIRECTOR.— 

9 (A) APPOINTMENT.—The Chairman shall 

10 appoint an executive director of the Commis11 sion. 

12 (B) COMPENSATION.—The executive direc13 tor shall be paid the rate of basic pay for level 

14 V of the Executive Schedule. 

15 (2) OTHER STAFF.—The Chairman may ap16 point and fix the pay of additional personnel. 

17 (3) PHYSICAL FACILITIES.—The Administrator 

18 of General Services shall locate suitable office space 

19 for the operation of the Commission. The facilities 

20 shall serve as the headquarters of the Commission 

21 and shall include all necessary equipment and 

22 incidentals required for the proper functioning of the 

23 Commission. 

24 (e) POWERS OF COMMISSION.— 


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1 (1) HEARINGS AND OTHER ACTIVITIES.—For 

2 the purpose of carrying out its duties, the Commis3 sion may hold such hearings and undertake such 

4 other activities as the Commission determines to be 

5 necessary to carry out its duties. 

6 (2) STUDIES BY GAO.—Upon the request of the 

7 Commission, the Comptroller General shall conduct 

8 such studies or investigations as the Commission de9 termines to be necessary to carry out its duties. 

10 (3) DETAIL OF FEDERAL EMPLOYEES.—Upon 

11 the request of the Commission, the head of any Fed12 eral agency is authorized to detail, without reim13 bursement, any of the personnel of such agency to 

14 the Commission to assist the Commission in car15 rying out its duties. Any such detail shall not inter16 rupt or otherwise affect the civil service status or 

17 privileges of the Federal employee. 

18 (4) TECHNICAL ASSISTANCE.—Upon the re19 quest of the Commission, the head of a Federal 

20 agency shall provide such technical assistance to the 

21 Commission as the Commission determines to be 

22 necessary to carry out its duties. 

23 (5) USE OF MAILS.—The Commission may use 

24 the United States mails in the same manner and 

25 under the same conditions as Federal agencies and 


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1 shall, for purposes of the frank, be considered a 

2 commission of Congress as described in section 3215 

3 of title 39, United States Code. 

4 (6) OBTAINING INFORMATION.—The Commis5 sion may secure directly from any Federal agency 

6 information necessary to enable it to carry out its 

7 duties, if the information may be disclosed under 

8 section 552 of title 5, United States Code. Upon re9 quest of the Chairman of the Commission, the head 

10 of such agency shall furnish such information to the 

11 Commission. 

12 (7) ADMINISTRATIVE SUPPORT SERVICES.— 

13 Upon the request of the Commission, the Adminis14 trator of General Services shall provide to the Com15 mission on a reimbursable basis such administrative 

16 support services as the Commission may request. 

17 (8) PRINTING.—For purposes of costs relating 

18 to printing and binding, including the cost of per19 sonnel detailed from the Government Printing Of20 fice, the Commission shall be deemed to be a com21 mittee of the Congress. 

22 (f) TERMINATION.—The Commission shall terminate 

23 30 days after the date of submission of the report required 

24 in subsection (b). 


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1 (g) LIMITATIONS ON AUTHORIZATION OF APPRO2 PRIATIONS.—There are authorized to be appropriated 

3 $2,500,000 to carry out this section. Any amount appro4 priated pursuant to the authority of this subsection shall 

5 remain available without fiscal year limitation until ex6 pended. 

Æ 


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