I 

112TH CONGRESS 

1ST SESSION H. R. 2506 

To establish the National Commission on Effective Marginal Tax Rates for 

Low-Income Families. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 12, 2011 

Mr. PETRI (for himself and Ms. TSONGAS) 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 the Workforce, 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 2011’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


jbell on DSKDVH8Z91PROD with BILLS
2 

•HR 2506 IH

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 working families, such as the earned income tax 

7 credit, the child tax credit, supplemental nutritional 

8 assistance program, housing assistance programs, 

9 Federal and State health care programs, child care 

10 assistance, and temporary assistance to needy fami11 lies, is based in part on income levels. The rates at 

12 which the benefits from such programs are phased 

13 out have the same disposable income reducing effect 

14 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 full consideration of the impact it 

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

25 the structure of the United States system for the 


jbell on DSKDVH8Z91PROD with BILLS
3 

•HR 2506 IH

1 support 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— 


jbell on DSKDVH8Z91PROD with BILLS
4 

•HR 2506 IH

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, 


jbell on DSKDVH8Z91PROD with BILLS
5 

•HR 2506 IH

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 18 months after 

16 the first meeting of the Commission, the Commis17 sion shall submit to the President and to the Chair18 man and Ranking member of each Committee of the 

19 House and the Senate that has legislative jurisdic20 tion over any of the Federal programs or revenue 

21 policies addressed therein, a report containing the 

22 following: 

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

24 following: 


jbell on DSKDVH8Z91PROD with BILLS
6 

•HR 2506 IH

1 (i) The Commission’s general rec2 ommendations for increasing coordination 

3 of the delivery of Federal benefits for low4 income families in order to reduce effective 

5 marginal tax rates and decrease disincen6 tives to work and marriage. 

7 (ii) The relative usefulness of sudden 

8 benefit cutoffs (sometime referred to as 

9 ‘‘cliffs’’) versus gradual reductions (some10 time referred to as ‘‘phaseouts’’) in Fed11 eral benefits on low-income workers’ behav12 ior relating to work and marriage. 

13 (iii) The interaction of Federal bene14 fits and State assistance programs, and 

15 the potential benefits of structuring State 

16 programs consistent with the design of 

17 Federal assistance. 

18 (iv) The maximum extent to which 

19 funding for Federal benefits can be appro20 priated annually avoiding the need to cre21 ate additional entitlement programs. 

22 (v) The extent to which low-income 

23 cohabiting couples (including couples with 

24 children and couples without children) re25 sist entering a legal marriage in order to 


jbell on DSKDVH8Z91PROD with BILLS
7 

•HR 2506 IH

1 maximize Federal benefits and avoid lost 

2 income. 

3 (B) RECOMMENDATIONS.— 

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

5 Commission’s recommendations relating to 

6 the following: 

7 (I) Combining all Federal bene8 fits which are not tax benefits into a 

9 single flexible voucher, allowing the 

10 beneficiary to allocate funds within 

11 each of the supported benefit areas. 

12 (II) To the extent possible, pro13 viding all eligible families with equal 

14 voucher funds described in clause (i), 

15 varying only for income, family size, 

16 and the presence of children in the 

17 household. 

18 (III) Combining all Federal bene19 fits which are tax benefits for low-in20 come families into a coordinated cred21 it that minimizes phaseouts, encour22 ages work, is adjusted for family size, 

23 and does not penalize marriage. 


jbell on DSKDVH8Z91PROD with BILLS
8 

•HR 2506 IH

1 (IV) Establishing a single eligi2 bility standard for all Federal bene3 fits. 

4 (ii) REVENUE NEUTRALITY.—In mak5 ing recommendations under this subpara6 graph, the Commission shall consider the 

7 need to maintain revenue neutrality in 

8 order to avoid increasing the deficit. 

9 (iii) BLUEPRINT FOR LEGISLATION.— 

10 The Commission shall provide a blueprint 

11 for legislative proposals for each policy rec12 ommendation under this subparagraph. 

13 (C) OTHER MATTERS.— 

14 (i) NON-FEASIBILITY.—Should the 

15 Commission conclude that the policy 

16 framework described in subparagraph (B) 

17 is not feasible, the Commission shall in18 clude in its report— 

19 (I) a detailed analysis of such 

20 policy framework, 

21 (II) a comprehensive explanation 

22 of the reasons for its conclusion, and 

23 (III) one or more policy rec24 ommendations addressing the problem 


jbell on DSKDVH8Z91PROD with BILLS
9 

•HR 2506 IH

1 of effective marginal tax rates on low2 income families. 

3 (ii) ADDITIONAL MATTER.—If the 

4 Commission includes in its report a policy 

5 plan using the policy elements described in 

6 subparagraph (B), it may also include ad7 ditional alternative recommendations (to8 gether with a legislative blueprint as pro9 vided under subparagraph (B)(iii)). 

10 (c) MEMBERSHIP AND MEETINGS.— 

11 (1) MEMBERS.—The Commission shall be com12 posed of 15 members, of whom 4 shall be members 

13 described in paragraph (2) and 11 shall be ap14 pointed pursuant to paragraph (3). 

15 (2) CABINET MEMBERS SERVING ON COMMIS16 SION.— 

17 (A) IN GENERAL.—The members described 

18 in this paragraph are the following Secretaries: 

19 (i) The Secretary of the Treasury. 

20 (ii) The Secretary of Agriculture. 

21 (iii) The Secretary of Housing and 

22 Urban Development. 

23 (iv) The Secretary of Health and 

24 Human Services. 


jbell on DSKDVH8Z91PROD with BILLS
10 

•HR 2506 IH

1 (B) NON-VOTING MEMBERS; CHAIRMAN.— 

2 Of the members of the Commission described in 

3 subparagraph (A)— 

4 (i) the 2 members with the least se5 niority in terms of service as Secretary 

6 shall be nonvoting members, 

7 (ii) the member with the most senior8 ity in terms of service as Secretary shall be 

9 the chairman, and 

10 (iii) in the event that the head of a 

11 cabinet department serving as a member of 

12 this Commission under subparagraph (A) 

13 is replaced, and that Cabinet Secretary 

14 was serving as a voting member of the 

15 Commission or as the Chairman of the 

16 Commission, the incoming Secretary shall 

17 assume such a role on the Commission 

18 without regard to the seniority criteria es19 tablished under this subparagraph. 

20 (3) APPOINTED MEMBERS.— 

21 (A) CONGRESSIONAL APPOINTMENTS.— 

22 The Speaker of the House of Representatives, 

23 the minority leader of the House of Representa24 tives, the majority leader of the Senate, and the 

25 minority leader of the Senate shall each appoint 


jbell on DSKDVH8Z91PROD with BILLS
11 

•HR 2506 IH

1 2 members, who shall each be experts in the 

2 subject matter of the Commission. 

3 (B) GOVERNORS.— 

4 (i) IN GENERAL.—The President shall 

5 appoint 3 State governors, of whom— 

6 (I) no more than 1 shall rep7 resent the same political party rep8 resented by the President, 

9 (II) 1 shall be a governor of a 

10 State which is ranked in the top third 

11 on the list of benefit providers estab12 lished under clause (ii), 

13 (III) 1 shall be a governor of a 

14 State which is ranked in the middle 

15 third on the list of benefit providers 

16 established under clause (ii), and 

17 (IV) at least 1 shall be a gov18 ernor of a State which is ranked in 

19 the lowest third on the list of benefit 

20 providers established under clause (ii). 

21 (ii) RANKING OF STATES.—The mem22 bers of the Commission described in para23 graph (2)(A) shall establish a list ranking 

24 of States from highest benefit providers to 


jbell on DSKDVH8Z91PROD with BILLS
12 

•HR 2506 IH

1 lowest benefit providers based on the fol2 lowing: 

3 (I) The level of benefits provided 

4 in the State under the Temporary As5 sistance to Needy Families under title 

6 IV of the Social Security Act. 

7 (II) The average fair-market 

8 value of rental housing in the State. 

9 (III) The State share of assist10 ance provided under a State plan 

11 under the Medicaid program under 

12 title XIX of the Social Security Act 

13 and a State child health plan under 

14 the State Children’s Health Insurance 

15 Program under title XXI of such Act. 

16 (C) DATE FOR ORIGINAL APPOINTMENT.— 

17 The appointing authorities described in para18 graph (1) shall appoint the initial members of 

19 the Commission not later than 30 days after 

20 the date of enactment of this Act. 

21 (D) TERMS OF APPOINTMENT.—The term 

22 of any appointment shall be for the life of the 

23 Commission. 

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

25 serving under paragraph (2), appointed under paraVerDate Mar 15 2010 03:05 Jul 13, 2011 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2506.IH H2506

jbell on DSKDVH8Z91PROD with BILLS
13 

•HR 2506 IH

1 graph (2)(B), or appointed under paragraph (3) 

2 may appoint a designee to serve on the Commission 

3 in such member’s place. 

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

5 first meeting of the Commission. Thereafter, the 

6 Commission shall meet at the call of its chairman or 

7 a majority of its members. 

8 (6) QUORUM.—A quorum shall consist of 9 vot9 ing members of the Commission. 

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

11 shall be filled in the same manner in which the origi12 nal appointment was made, not later than 30 days 

13 after the Commission is given notice of the vacancy, 

14 and shall not affect the power of the remaining 

15 members to execute the duties of the Commission. 

16 (8) COMPENSATION.—Members of the Commis17 sion shall receive no additional pay, allowances, or 

18 benefits by reason of their service on the Commis19 sion. 

20 (9) EXPENSES.—Each member of the Commis21 sion shall receive travel expenses and per diem in 

22 lieu of subsistence in accordance with sections 5702 

23 and 5703 of title 5, United States Code. 

24 (d) COMMISSION STAFF.— 


jbell on DSKDVH8Z91PROD with BILLS
14 

•HR 2506 IH

1 (1) APPOINTMENT AND COMPENSATION.—The 

2 chairman, in accordance with rules agreed upon by 

3 the Commission, may appoint and fix the compensa4 tion of a staff director and such other personnel as 

5 may be necessary to enable the Commission to carry 

6 out its functions, without regard to the provisions of 

7 title 5, United States Code, governing appointments 

8 in the competitive service, and without regard to the 

9 provisions of chapter 51 and subchapter III of chap10 ter 53 of such title relating to classification and 

11 General Schedule pay rates, except that no rate of 

12 pay fixed under this subsection may exceed the 

13 equivalent of that payable for a position at level V 

14 of the Executive Schedule under section 5316 of title 

15 5, United States Code. 

16 (2) PERSONNEL AS FEDERAL EMPLOYEES.— 

17 (A) IN GENERAL.—The executive director 

18 and any personnel of the Commission who are 

19 employees shall be employees under section 

20 2105 of title 5, United States Code, for pur21 poses of chapters 63, 81, 83, 84, 85, 87, 89, 

22 and 90 of that title. 

23 (B) MEMBERS OF COMMISSION.—Subpara24 graph (A) shall not be construed to apply to 

25 members of the Commission. 


jbell on DSKDVH8Z91PROD with BILLS
15 

•HR 2506 IH

1 (C) DETAILEES.—Any Federal Govern2 ment employee detailed to the Commission shall 

3 retain the rights, status, and privileges of his or 

4 her regular employment without interruption. 

5 (D) EXPERT AND CONSULTANT SERV6 ICES.—The Commission is authorized to pro7 cure the services of experts and consultants in 

8 accordance with section 3109 of title 5, United 

9 States Code, but at rates not to exceed the 

10 daily rate paid a person occupying a position at 

11 level IV of the Executive Schedule under section 

12 5315 of title 5, United States Code. 

13 (E) VOLUNTEER SERVICES.—Notwith14 standing section 1342 of title 31, United States 

15 Code, the Commission may accept and use vol16 untary and uncompensated services as the Com17 mission determines necessary. 

18 (e) POWERS OF COMMISSION.— 

19 (1) HEARINGS AND OTHER ACTIVITIES.—For 

20 the purpose of carrying out its duties, the Commis21 sion may hold such hearings and undertake such 

22 other activities as the Commission determines to be 

23 necessary to carry out its duties. 

24 (2) DETAIL OF FEDERAL EMPLOYEES.—Upon 

25 the request of the Commission, the head of any FedVerDate Mar 15 2010 03:05 Jul 13, 2011 Jkt 099200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H2506.IH H2506

jbell on DSKDVH8Z91PROD with BILLS
16 

•HR 2506 IH

1 eral agency is authorized to detail, on a reimburs2 able basis, any of the personnel of such agency to 

3 the Commission to assist the Commission in car4 rying out its duties. Any such detail shall not inter5 rupt or otherwise affect the civil service status or 

6 privileges of the Federal employee. 

7 (3) CONTRACTING.—The Commission may, to 

8 such extent and in such amounts as are provided in 

9 appropriation Acts, enter into contracts to enable 

10 the Commission to discharge its duties under this 

11 title. 

12 (4) TECHNICAL ASSISTANCE.—Upon the re13 quest of the Commission, the head of a Federal 

14 agency shall provide such technical assistance to the 

15 Commission as the Commission determines to be 

16 necessary to carry out its duties. 

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

18 the United States mails in the same manner and 

19 under the same conditions as Federal agencies and 

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

21 commission of Congress as described in section 3215 

22 of title 39, United States Code. 

23 (6) INFORMATION FROM FEDERAL AGENCIES.— 

24 (A) IN GENERAL.—The Commission is au25 thorized to secure directly from any executive 


jbell on DSKDVH8Z91PROD with BILLS
17 

•HR 2506 IH

1 department, bureau, agency, board, commission, 

2 office, independent establishment, or instrumen3 tality of the government, information, sugges4 tions, estimates, and statistics for the purposes 

5 of this title. Each department, bureau, agency, 

6 board, commission, office, independent estab7 lishment, or instrumentality shall, to the extent 

8 authorized by law, furnish such information, 

9 suggestions, estimates, and statistics directly to 

10 the Commission, upon request made by the 

11 chairman, the chairman of any subcommittee 

12 created by a majority of the Commission, or 

13 any member designated by a majority of the 

14 Commission. 

15 (B) RECEIPT, HANDLING, STORAGE, AND

16 DISSEMINATION.—Information shall only be re17 ceived, handled, stored, and disseminated by 

18 members of the Commission and its staff con19 sistent with all applicable statutes, regulations, 

20 and Executive orders. 

21 (7) ADMINISTRATIVE SUPPORT SERVICES.— 

22 Upon the request of the Commission, the Adminis23 trator of General Services shall provide to the Com24 mission on a reimbursable basis such administrative 

25 support services as the Commission may request. 


jbell on DSKDVH8Z91PROD with BILLS
18 

•HR 2506 IH

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

2 to printing and binding, including the cost of per3 sonnel detailed from the Government Printing Of4 fice, the Commission shall be deemed to be a com5 mittee of the Congress. 

6 (f) TERMINATION.—The Commission shall terminate 

7 30 days after the date of submission of the report required 

8 in subsection (b). 

9 (g) LIMITATIONS ON AUTHORIZATION OF APPRO10 PRIATIONS.—There are authorized to be appropriated 

11 $2,500,000 to carry out this section. Any amount appro12 priated pursuant to the authority of this subsection shall 

13 remain available without fiscal year limitation until ex14 pended. 

Æ 


jbell on DSKDVH8Z91PROD with BILLS