Statement of the Hon. Jerry Weller, M.C., Illinois

Testimony Before the House Committee on Ways and Means

Hearing on President's Tax Relief Proposals that Affect Individuals

March 21, 2001

I want to thank you for granting me the opportunity to testify on this historic effort to bring about tax fairness. I appreciate the Committee allowing me to testify on an issue that is really an issue of fairness for working couples, eliminating the marriage tax penalty imposed on married working couples by our tax code.

On March 16, 2001, Representatives Barcia, Capito, Kerns and I introduced H.R. 6 with the goal of significantly reducing the marriage tax penalty for the majority of Americans families who suffer it. H.R. 6 now enjoys broad bipartisan support with 225 cosponsors. The bill we introduced last week is exactly the same as the bill the House and Senate sent to President Clinton last year. Unfortunately, President Clinton chose to veto this bill, in spite of the fact that 51 Democrats voted in favor of the Conference Report. I am proud that HR 4810 has obtained such strong bipartisan support and I look forward to working with Representative Barcia, the lead Democrat cosponsor of HR 6, to continue to increase the bipartisan support for HR 6 this year.

As it was introduced on March 16th, H.R. 6 significantly reduces the marriage penalty for 25 million American working couples by doubling the standard deduction to twice that of singles and widening the 15% income tax bracket to relieve the marriage tax penalty on those who itemize their taxes as homeowners. The bill also provides marriage tax relief for the working poor who benefit from the Earned Income Credit and ensures that no one sees their taxes rise because of this proposal and its relationship to AMT.

Since 1969, our tax laws have punished married couples. For no other reason than the decision to be joined in holy matrimony, more than 25 million couples a year are penalized an average $1,400 per year. They pay more in taxes than they would if they were single. Not only is the marriage penalty unfair, it's immoral that our tax code punishes society's most basic institution. The marriage tax penalty exacts a disproportionate toll on working women and lower income couples with children.

Let me give you an example of how the marriage tax penalty unfairly affect a middle class, married working couple in my district.

By now, many of you are familiar with two school teachers that live in my district in Joliet, Illinois. Shad and Michelle Hallihan make a combined income of $61,500 a year in salary. Let's assume that they each make about the same salary - Shad at $31,500, Michelle at $31,000. In addition, they have one child. If they both filed their taxes as singles, as individuals, they would pay taxes in the 15 percent bracket.

But when they made the choice to live their lives in holy matrimony, and now file jointly, their combined income of $61,500 pushed part of their income into a higher tax bracket of 28 percent, producing a tax penalty of $828 in higher taxes.

On average, America's married working couples pay $1,400 more a year in taxes than individuals with the same incomes. That's serious money. $1,400 is a year's tuition at Joliet Junior College. Over ten years, average couples pay $14,000 more in taxes than singles! This can represent the cost of a new car or a year of college tuition at almost any university in America.

I believe that in an era of federal budget surpluses which do not include Social Security revenues, American families deserve a fairer tax code. We should focus on tax code fairness and simplification beginning with eliminating the unfairness of the marriage tax penalty.

I think the issue of the marriage penalty can best be framed by asking these questions: Do Americans feel its fair that our tax code imposes a higher tax penalty on marriage? Do Americans feel its fair that the average married working couple pays almost $1,400 more in taxes than a couple with almost identical income living together outside of marriage-- is it right that our tax code provides an incentive to get divorced?

Eliminating the marriage tax penalty addresses an important issue of fairness - I am excited by the prospect that we can work together to eliminate it. Mr. Chairman, I would again like to thank you for giving me the opportunity to address the Committee on this important issue affecting 25 million American families. I would be happy to answer any questions.