Tax Cuts for Married Couples Turning Into Hot Issue

Thursday, February 10th 2000, 12:00 am

By: News On 6

Just in time for Valentine's Day, tax cuts for married couples took center stage in Congress Thursday. House Republicans vied with Democrats over ending the so-called marriage tax penalty.

Nearly half of all married couples-- typically middle-income double-earners pay the I-R-S more taxes than if they'd stayed single and filed separately. "This is the tax code, it
has within it a punishment for marriage," said Rep. Dick Armey, R-TX. Republicans chose a fix to that so-called marriage penalty as the opening wedge of their election-year drive for tax cuts. "It pays back folks for the overpayments they've made when they're married," noted Rep. Jennifer Dunn, R-WA.

The Republican plan would phase in a $182 billion tax cut over 10 years. It would benefit all couples who file jointly...including millions of single earners who currently enjoy a tax bonus for being married.

Democrats called the size of the G-O-P tax cut way too big. "Fix the marriage tax penalty which is about half of the bill before us today by the majority,â€ said Rep. Charles Stenholm, D-TX. â€œFix that."

The Democrats countered with their own cheaper fix-- targeted on low and middle-income earners. Rep. Dick Gephardt, D-MO said, "We need to come up with a budget plan that strengthens social security and medicare first and that pays off the national debt by 2013."

The Republicans had no trouble passing their version in the house Thursday. But action in the senate may bog down because there's no agreement about how to make
up for the lost tax revenue.

The White House has threatened to veto any marriage penalty fix that might eat into the Social Security surplus. Republicans also say they'll move to end the earnings limit on Social Security recipients. Thatâ€™s an idea that President Clinton supports, too.