Terry Everett, May 10, 2004

Over the last two weeks, the U.S. House of Representatives has passed legislation to ensure that American workers and families are not saddled with a return to higher taxes in the coming years. On April 28, the House passed a bill to make marriage penalty relief permanent, and on May 5, we voted to extend the current exemption for the Federal alternative minimum tax. Both of these bills now await action in the U.S. Senate.

The recent positive news of an improving American economy and a return to job creation is in large part due to the result of tax relief passed by Congress in 2001. That same year, this nation faced a growing recession which had begun in 2000, followed by the undermining effects of corporate scandals compounded by the catastrophic blow of the 9/11 terrorist attacks. Had it not been for the President's bold plan of meaningful tax relief stretched out over the majority of American workers and businesses, we might be deeper in recession or worse today.

The President believes, as do I, that Americans deserve to keep more of their hard-earned pay and that real tax relief will spur the economy through increased spending and investment and job creation. In 2001, Congress passed this relief, but due to arcane rules of the U.S. Senate, it failed to become permanent and much of it will expire at end of this decade. Because an end to this beneficial relief would amount to a tax increase on most Americans by 2011, the House is taking action.

On April 28, the House passed the Marriage Penalty Relief Act of 2004 (HR 4181). What is the marriage penalty? It is a feature in the Federal Tax Code which penalizes working married couples by forcing them to pay higher taxes than if they were single earning a similar amount. It is unfair and in 2001 Congress voted to offset the marriage penalty by gradually increasing married couples' standard deduction to twice that of individual filers. Furthermore, this relief was accelerated in last year's Jobs and Tax Growth Act.

The marriage penalty has been a very real burden on over 30 million American couples, including some 450,000 in Alabama. The recent relief has meant a reduction in taxes by some $300 for the average working married couple. Unfortunately, unless action is taken to make this relief permanent, couples will be socked with an average $300 tax increase next year growing to a $700 increase by 2011. That is why the House took action, and it is now up to the Senate to follow our lead to protect working couples.

Last week, the House also passed the Middle Class Alternative Minimum Tax Relief Act (HR 4227). This legislation would extend the exemption in the alternative minimum tax, first temporarily approved in 2001, for another year. The alternative minimum tax was created in 1969 to prevent wealthy Americans from using deductions and tax loopholes to avoid paying their fair share of taxes. However, it needs updating as it now targets middle income Americans with modest incomes. The one-year extension approved by the House would exempt single taxpayers making $40,250 and married couples filing jointly earning $58,000. If no action is taken, those income thresholds would fall to $33,750 and $45,000 respectively in 2005. Again, the Senate has yet to pass this tax relief bill.

In the coming weeks, the House is also scheduled to vote on making permanent other important tax relief measures enacted in 2001, including the Tax Rate reduction and the child tax credit. I'll keep you posted on our progress.

Congressman Terry Everett, a Republican, represents Alabama's Second Congressional District, which includes the state capitol, Montgomery.