Republican 'marriage-penalty' tax cut nears passage

WASHINGTON - Republicans are on the brink of sending President Clinton a centerpiece of their election-year tax relief agenda, a bill cutting income taxes $248 billion over 10 years for millions of married couples.

The Senate was expected to pass the ''marriage penalty'' bill Tuesday, sending it to the House, where swift approval also was anticipated.

Republicans are aiming to send the legislation to Clinton before the GOP's national political convention begins July 31 in Philadelphia in hopes of drawing public attention to their differences with Democrats on tax cuts.

''We will see who supports marriage tax relief, and we will see who thinks American families are not entitled to this relief,'' said Sen. William Roth, R-Del., the Senate Finance Committee chairman.

Clinton has said he could sign the measure into law only under one condition: That Congress also send him an acceptable bill creating a prescription drug benefit in the Medicare program. White House spokesman Joe Lockhart accused Republicans of playing politics by passing the tax-cut bill alone to force a veto.

''They can make political points, pass bills so they can talk about them at their convention, or we can get marriage penalty relief and prescription drugs for seniors,'' Lockhart said. ''It's up to them: politics or substance?''

Elimination of the marriage penalty was the centerpiece of the $792 billion Republican tax cut that Clinton vetoed last year. Republicans have spent this year passing bite-sized pieces of that larger tax cut using the huge anticipated budget surplus, hoping to frame clearer election-year distinctions between themselves and Democrats.

A Treasury Department analysis of seven GOP tax measures that have passed the House Ways and Means Committee this year said that together, 76 percent of the cuts would go to the 23 million wealthiest families. The remaining 91 million families would get just over 23 percent.

Treasury Secretary Lawrence Summers told reporters the administration prefers tax cuts targeted at low- and middle-income taxpayers instead of ''large tax cuts that are heavily backloaded and primarily benefit the highest-income Americans.''

The marriage penalty bill gradually would enlarge both the 15 percent and 28 percent tax brackets so they apply to a greater share of a married couple's income. Today, two single people enjoy wider tax brackets than a comparable married couple, resulting in an average tax bill $1,400 higher for 25 million couples.

''This is not just tax relief, it's a tax correction,'' said Sen. Kay Bailey Hutchison, R-Texas.

The measure also would boost a married couple's standard deduction in 2001 so that it equals that of two single people - in 2000 dollars, an increase from $7,350 to $8,800. It would increase the income cap for low-income couples who claim the earned-income tax credit and ensure that the alternative minimum tax is not triggered when couples claim any of several personal credits.

On a 50-46 vote Monday, the Senate defeated a Democratic alternative costing $54 billion over 10 years that would have given couples the choice of filing joint tax returns or as two singles, whichever benefits them more, with benefits phasing out at incomes between $100,000 and $150,000.

Democrats say the Republican bill would cut taxes of millions of married couples who don't now pay penalties, usually those in which one spouse earns most of the family income, and would give unnecessarily large tax cuts to upper-income people.

''This isn't a marriage-penalty bill. It's a tax cut disguised as a marriage-penalty bill,'' said Sen. Max Baucus, D-Mont.

Republicans planned action on two other tax bills this week:

-The House is expected to pass legislation gradually raising contribution limits for individual retirement accounts from $2,000 to $5,000 annually and for 401(k)s from $10,500 to $15,000. Total cost: About $17 billion over five years.

-The House Ways and Means Committee will consider a bill to repeal a 1993 tax increase in which income tax was imposed on 85 percent - up from 50 percent - of Social Security benefits of recipients earning over $34,000 for individuals, $44,000 for married couples. That bill would cost an estimated $44.6 billion over five years. ----

The marriage penalty bill is H.R. 4810.

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