GOP hopes to capitalize on 'unfair' taxes

Noe Garcia and his wife, Consuelo, figure they lose more than $1,000 a year in extra taxes because they're married.

"It's not like we're going to do something drastic, like get divorced, to avoid it. But when you sit down in April and do your taxes, you can't help thinking how unfair it is - and what else you could be doing with that money," says Mr. Garcia, a San Antonio insurance salesman.

"Unfair" is the new Republican mantra for Election 2000. On Friday, the Senate voted to repeal the estate tax, with GOP leaders arguing that it's unfair to make death a taxable event. Today, senators will vote to repeal the equally unpopular marriage penalty.

President Clinton says he will veto both measures, which would cost $350 billion over the next 10 years, because they are too broad and drain resources from other budget priorities.

The marriage penalty is the result of features in the US tax code that treat income from married couples differently than income from single taxpayers. Some 21 million married couples, or about 42 percent of those married in the United States, pay an average of $1,400 more in taxes than they would if they were single. The penalty can run as high as $20,000 and especially hurts dual-income families.

But it's more complex than it looks. Some married couples actually benefit from the current tax code. And critics say the Republican plan tilts future benefits toward the most prosperous.

For example, the House version of marriage tax relief, which passed 269-159 last week, gives two-thirds of the annual tax breaks to couples making more than $75,000 a year, according to the Washington-based Citizens for Tax Justice. The bill boosts the standard deduction to twice that of singles in 2001 and expands the bottom 15 percent income tax bracket. It would cost $182 billion over 10 years.

The Senate version to be voted on today would also expand the next-highest 28 percent tax bracket so that by 2007 it is double the bracket for two single people, at a cost of $248 billion.

Neither vote is expected to be veto-proof. Last week's 59-to-39 estate-tax vote fell short of the two-thirds needed to overturn an expected presidential veto. Tonight's vote on the marriage penalty is also expected to fall short of a veto-proof margin.

But some Republicans say that doesn't matter. With Democrats on record voting against an extremely unpopular tax, they say, the issue will be ensure that Republicans keep control of the Congress, George W. Bush wins the presidency, and repeal sails through the next Congress.

"We think it's outrageous that people pay $1,400 for the right to be married," says Sen. Phil Gramm (R) of Texas. "Next year, we'll have a president who will change that."

President Clinton has offered to sign the repeal of the marriage penalty, if Congress passes the Democratic version of a prescription drug benefit - an offer Republicans reject.

"We will pass marriage-penalty relief Monday night, and we're going to do it without making it contingent on opening up a new entitlement," says assistant majority leader Don Nickles (R) of Oklahoma.

"He said he wanted it in his State of the Union - now he will have an opportunity to sign it," adds Senate majority leader Trent Lott (R) of Mississippi.

Tax experts say Republicans aren't calculating the full cost of eliminating these taxes. "Politically, it's a very clever approach to divide up the tax cut. But no one seems to be thinking much about the overall cost of the packages put together," says William Gale, senior fellow at the Brookings Institution here.

"There's this idea that there's a $4.2 trillion surplus, so of course we can afford this. In fact, the usable surplus is about 1/14th that big - about $300 billion over 10 years," he adds.

Democrats charge that Republicans are so eager to capitalize on this issue for fall campaigns that they are not willing to compromise. The marriage-penalty bills are simply "veto bait," says Rep. Charles Rangel (D) of New York.

However, Republicans and Democrats did find one tax they could agree to cut. On Thursday, the Senate voted 97 to 3 to repeal the federal excise tax on telephones - a "temporary" tax enacted in 1898 to help fund the Spanish-American War.

(c) Copyright 2000. The Christian Science Publishing Society