Can Treasury stay afloat without 'marriage penalty?'

An embarrased Congress is still trying to live down a quirk in its tax law which makes it cheaper for some couples to live together without marriage. Testifying before the House Ways and Means Committee, Angela and David Boyter pleaded with Congress to change the law before they have their fourth divorce. As a dramatic means of emphasizing the so-called "marriage penalty" of present federal income tax laws the couple has divorced three times and remarried.

Nobody wants to joke about America's sharp social change: where the divorce rate has increased 96 percent, the number of unmarried men and women living together has increased 149 percent, and where more and more women work, so that 6 out of 10 marriages have two wage earners. The new census is expected to show more of the same.

Sen. Charles McC. Mathias Jr. (R) of Maryland has introduced a bill to end the marriage penalty, similar to one introduced by Rep. Millicent Fenwick (D) of N.J. in the House. All very well, testified Emil M. Sunley, the Treasury's deputy assistant secretary for tax policy, but the remedy won't be cheap: The "marriage penalty" brings a hefty bonus to the government. He said that 15.9 million couples are paying $8.3 billion in "penalties," averaging $524 each.

It all came about in 1969 when Congress passed a tax law inadvertently putting an extra burden on husband and wife who both work and who file a joint return. If they could file separate returns they would save money.

Any happily married couple can smile about it, but congressmen found it preposterous that the government, in effect, is encouraging nonmarriage. Instead of remaining Mr. and Mrs., the Boyters split up repeatedly with annual quickie Maryland divorces.

In an extreme case here's how it works:

Mr. and Mrs. Smith both work and their combined gross income is $60,000. With joint returns they pay $18,698 in taxes. So they agree to separate (legally, that is) and Mrs. Smith takes back her maiden name. Now they file separate returns on the same $60,000 gross revenue. Tax -- $15,044. That's a saving of $3,654.

Everybody seems agreed the law should be changed, but relief may not come this year. After all $8 billion is $8 billion, and the Treasury has a deficit. The administration hasn't taken a position yet, Mr. Sunley told the committee.

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