Issue Description

On June 7, 2001, President Bush signed into law the Economic Growth and Tax Relief Reconciliation Act of 2001 (H.R. 1836). H.R. 1836, now Public Law No: 107-16, amended the Internal Revenue Code of 1986 gradually reducing the marriage tax penalty by adjusting the standard deduction, the 15 percent rate bracket, and the earned income credit. The amendments made by sections 301-303 in Title III of Public Law No: 107-16 are to apply to all taxable years beginning after December 31, 2004.

This law will benefit many families by eliminating the Marriage Tax Penalty for the lower tax bracket and treating married couples equally with those who are single. HSLDA supports this new law.

Issue Background

Previous IRS code taxed the incomes of married couples at a much higher rate than that of an unmarried, cohabiting couple. HSLDA opposed this method of taxation since the God given institution of marriage should be encouraged—not penalized.

According to the American Institute of Certified Public Accountants, increasing the standard deduction and rate schedule for joint filers would compensate for the 66 provisions of the existing tax code that create marriage penalties.

The elimination of the marriage penalty was not only a necessary form of financial relief; it was also a very important policy change. It provided an opportunity for the government to recognize and support the vital contribution marriage makes to our society.

Under former code law if a married couple—with one income or two—makes the same income as two singles, the married couple will likely be paying higher taxes simply for being married. By eliminating the marriage tax married couples are treated equally, whether they earn one income or two.