We Need Pro-Marriage and Family Tax Policies
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We need a tax code that supports working families. The Republicans introduced H.R. 1, the Tax Cuts and Jobs Act, on Nov. 2, claiming that it delivers large tax cuts to middle class families. This may be true of a small slice of families, but it delivers a large tax hike to many more working families, and most of its tax benefits to the wealthiest passive investors and heirs.
Unfortunately, H.R. 1 misses the opportunity to address marriage penalties in the tax code. Couples beginning their lives together and single parents should not be discouraged from getting married by having to pay thousands more a year in taxes for tying the knot. We call for Members of Congress to make elimination of marriage penalties one of the top priorities for any major tax changes.
Under H.R. 1, two single parents each making $60,000 and not itemizing deductions would have to pay $2,244 more in taxes every year if they get married than if they lived together without marriage. That’s a 22% tax hike for giving their children the stability of a committed marriage!
Young professionals wanting to get married pay thousands of dollars in extra taxes for that as well. Fixing the marriage penalty would actually be fairly simple: allow couples to calculate what their taxes would be if they were separate taxpayers and as a married couple, and take the lower of the two numbers. Virginia is an example of a state that has eliminated the marriage penalty from its income tax system this way.
H.R. 1 also makes it harder for young adults to save money to afford to get married and start a family, by taking away the tax deduction for student loan interest, as well as deductions for state income or sales taxes for those who itemize. Other hits on working families include making tuition reduction benefits for teachers and their family members taxable, and removing tax benefits for employers who pay for education, childcare, and accommodations for employees with disabilities. Promised tax benefits to help working parents pay for childcare also failed to materialize in this proposal.
While we support expansion of the child tax credit, H.R. 1 takes away with one hand what it gives with the other, by eliminating the personal exemption. Low and modest income families will only see about $100 more per year per child in their pockets from this trade-off, while many families in the 25% tax bracket under the proposal would pay over $400 more in taxes for each child.
Last, but certainly not least, we strongly oppose the elimination of adoption tax credits. Adoption has become very expensive; taking away these credits puts it even further out of reach for middle class families. Adoption saves lives and gives children a stable loving home--why on earth would we not want to support that anymore?
We call on Members of Congress to refocus tax reform efforts on eliminating the marriage penalty, and giving all working families a tax cut. Now is not the time to play PR games with family finances, while handing huge tax benefits to the wealthiest passive investors and heirs. Marriage and raising children are investments in our common well-being and future. They should be supported, not penalized, by our tax system.
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