Committee on Ways and Means

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NEWS

FROM THE COMMITTEE ON WAYS AND MEANS

FOR IMMEDIATE RELEASE Contact: Trent Duffy or Greg Crist

March 22, 2001 (202) 225-8933

Committee Passes Marriage Penalty,
Child Credit Tax Relief

Second Tax Relief Plan Set for House Consideration as Early as Next Week

WASHINGTON - The Ways and Means Committee today approved a plan relieving millions of married couples of an unfair tax burden and providing millions of families with children tax relief beginning this year. Passed by a 23-16 vote, H.R. 6, the Marriage Penalty and Family Tax Relief Act of 2001, would provide $399 billion over 10 years in tax relief. The plan could be considered by the House of Representatives as early as next week.

"Married couples shouldn't be discriminated against by the tax code. That's not fair and our plan will fix that. We should also help stay-at-home moms and dads in this bill. Raising a child -- especially in this day and age -- is the most important job of being a parent, and so this bill helps them as well. In addition to fixing the marriage tax penalty, we help millions of families with children. Under this plan, a family of four would get an additional $1,000 in tax relief to spend or save however they wish; for new clothes, college savings, or a host of other items in a family budget," said Chairman Bill Thomas (R-CA).

The Marriage Penalty and Family Tax Relief Act of 2001:

The plan raises the standard deduction for married couples filing jointly so that it is equal to twice the standard deduction for single filers. It also expands the lowest present tax bracket (15%) to twice that of the corresponding bracket for single filers.

To help low income working families, the plan increases the Earned Income Credit (EIC), making more couples eligible for EIC assistance. The plan also repeals the current-law provisions that offset the refundable child credit and the earned income credit by the amount of the alternative minimum tax.

The plan doubles the child credit from $500 to $1000 by 2006, increasing the credit to $600 retroactive to this year. The plan would also make the child credit fully exempt from the alternative minimum tax.

When coupled with the Economic Growth and Tax Relief Act passed on March 8^th, the expanded child credit would provide an average family of four up to an additional $560 in tax relief for 2001 ($360 from marginal rate cuts plus $200 from an additional $100 per child tax credit in 2001).

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