Tax hitch to getting married may soon be eased by US

It may not hurt as much to be married, come 1981. At least, that's the view here, as Congress gets closer to enacting a tax cut. One key element of that cut, which is now assumed to be a virtual certainty for early 1981 no matter who is elected president, is an easing of the "marriage tax" penalty.

The marriage penalty grew out of tax code changes enacted in 1969. Under the tax provisions, millions of married people with two incomes in effect pay substantially more in taxes than if they were single.

Now, Congress at last appears to be close to scrapping -- or at least sharply minimizing -- this anomally. the tax-cut bill that is before the Senate, awaiting floor action, would sharply reduce the marriage penalty. Moreover, some variation of the Senate bill is considered equally likely on the House side. the upshot: Congress is expected to enact an easing of the marriage penalty sometime early next year that will apply to 1981 taxes -- the tax bill that will come due on April 15, 1982.

According to US Treasury analysis, the impact of the "marriage penalty" can be substantial, rising from slightly over $200 for $10,000 combined income, to more that $1,000 for $30,000 combined income, to close to $2,800 for $50,000 combined income.

Some outside groups, such as the Tax Divorce Consultants Inc., have estimated the hidden tax as even larger.

If this inequity does crumble in Congress, it could mean a revenue loss to the Treasury of as much as $8 billion or more annually, according to Emil M. Sunley, deputy assistant Treasury secretary for tax policy.

The $39 billion tax cut measure before the Senate, passed in August by the Senate Finance Committee, would allow a deduction of 5 percent of the first $30, 000 in earnings of the spouse having the lower income, for tax year 1981. The maximum actual deduction would be $1,500. Starting in calendar year 1982 and thereafter, the reduction would be 10 percent, for a maximum deduction of $3,000 .

Finance Committee tax economists estimate Treasury losses under their plan would be $3.4 billion for fiscal 1982; $6.8 billion for fiscal 1983; $8.3 billion for fiscal 1984; and $9.7 billion for fiscal 1985.

The Senate Finance Committee tax plan must still come to a full floor vote -- a move that has so far been successfully fought off by that chamber's Democratic leadership. President Carter has resisted a tax cut this year, in contrast to Republican contender Ronald Reagan. No action is expected on the Senate plan until after the election.

In the House, a number of versions of a marriage tax-reform measure are before the House Ways and Means Committee. Most important, the concept has won the support of committee chairman Al Ullman (D) of Oregon. That alone is expected to provide the important backing needed for adoption of such a bill by early next year.

The variations of the marriage proposal on the House side are essentially twofold:

* Legislation similar to the Senate version, which would provide for a percentage reduction in the tax. Under a plan put forth by Mr. Ullman, for example, there would be a reduction of 10 percent of the first $20,000 in income of the lower-earning spouse. the maximum deduction would be $2,000.

* An across-the-board provision supported by a number of House lawmakers that would allow married couples to file as two single individuals if that gave them a tax advantage. Some tastes, such as Virginia, have similar provisions.

Some tax analysts, such as Alicia Munnell, an economist and vice-president of the Federal Reserve Bank of Boston, argue that the present marriage tax provision ignores the realities of society. The code is based on the unit of the family, for tax purposes. Yet today, more than half of all married women work.

Moreover, it is argued, higher divorce rates, plus the factor of more unmarried people living together, have outdated older taxing methods. Dr. Munnell, for her part, has proposed that the United States should make the individual the basis of the tax system.

Some 14 of the 24 member nations in the Organization for Economic Cooperation and Development (OECD) now use "individual" taxation -- as opposed to using the family as the basic unit of the tax code.

Although the present marriage tax is widely perceived as affecting the "well-to- do" most, the effect, in fact, is widespread.

According to Rep. Barber B. conable Jr. (R) of New York, a member of the Ways and Means Committee, "most couples affected by the marriage penalty have relatively modest incomes."

Thus, he notes, 20 percent of the families affected by the tax have combined incomes of $10,000 or less; 54 percent are between $10,000 and $20,000; and 25 percent between $20,000 and $50,000.

Only 1 percent, he reckons, have incomes of more than $50,000.

What seems increasingly likely is that sometime next year the marriage tax -- barring a last-minute reprieve -- will itself be divorced from the US tax code.

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