Washington (April 30, 2004) -- House members this week pushed through by a huge margin a bill that would lock in the temporary marriage penalty relief provided under President Bush's tax cut plan.
The bill, H.R. 4181, which would permanently extend the increased standard deduction and the 15 percent individual income tax rate bracket expansion for married taxpayers filing joint returns, was approved by the House on Wednesday by a vote of 323 to 95. The bill must be passed by the Senate before it becomes law.
Under the so-called marriage penalty, some married couples pay higher rates because their combined earnings push them into higher tax brackets. Unless Congress acts to make the tax cuts provided under the Economic Growth and Tax Relief Reconciliation Act of 2001 permanent, the marriage penalty would reappear next year in a smaller form and would be fully revived in 2011. According to House Majority Leader Tom DeLay, R-Texas, the average family of four will see its taxes rise by over $300 if the law isn't enacted this year.
With the upcoming election, lawmakers are expected to consider several bills in the coming weeks that would make other temporary tax cuts permanent. The $400 increase in the child tax credit and an expansion of the 10 percent tax bracket are also set to expire at the end of the year.
-- WebCPA staff
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