Permanent tax cut OK’d

The House yesterday voted to permanently extend the 2001 tax relief for married couples, sending the bill to the Senate and kicking off what promises to be an election year of partisan wrangling over tax-related issues.

“The greatest error we could make would be to allow a tax increase on our families. This is the right bill, this is the right time,” said Rep. Jim Gerlach, Pennsylvania Republican and sponsor of the measure.

The provisions that are being made permanent were part of President Bush’s 2001 tax-cut package and are designed to eliminate what lawmakers call the marriage penalty, which results in many couples paying higher taxes than they would if they were single. Even though some House Democrats complained about the bill yesterday, it was approved overwhelmingly, 323-95, with 102 Democrats supporting it.

The bill — which applies to married couples, defined under federal law as opposite-sex couples — was the first in a series of measures that House Republican leaders will bring to the floor in the next month to permanently extend tax cuts set to expire at the end of the year. Two others would make permanent the $1,000 child-tax credit and the expanded 10 percent tax bracket for low-income persons.

The House will also consider legislation next week aimed at providing relief from the alternative minimum tax for many middle-class families.

Republicans hope enough Senate Democrats will feel pressured to support these bipartisan measures to get it through that chamber. But if that doesn’t happen, Republicans will have an issue to use against Democrats on the campaign trail this year, House Republican leadership aides said.

“If you provide tax relief for the families, they’ll use the money wisely and create new jobs,” Rep. Sherwood Boehlert, New York Republican, said yesterday. “We’ve got the right ticket to drive this economy forward if we provide much-needed tax relief.”

Some House Democrats said Republicans and Mr. Bush are being fiscally irresponsible by not paying for their tax cuts.

“We want tax relief, and we want it paid for,” said Rep. Jim McGovern, Massachusetts Democrat, who said that the economy is a mess and that 2.6 million jobs have been lost under the Bush administration.

“We are … borrowing the money and sending the bill to our children,” said Rep. Richard E. Neal, Massachusetts Democrat, adding that Republicans have “tax-cut fever” at a time when the money is needed for the troops in Iraq and Afghanistan.

One Senate Democratic aide said the House Republicans’ plan to continuously pass separate tax-relief bills this year is a “purely partisan” election-year strategy.

“It’s all about taking the vote,” the aide said. “They’re not interested in getting something done. They just want the issue.”

Yesterday’s bill permanently would extend the increase of the top income level eligible for the 15 percent tax bracket for married couples, as well as bump up the standard deduction that married couples who don’t itemize their taxes can claim. Without the bill, these benefits would begin to phase out in 2005 and expire completely in 2010.

Democrats said the Republicans weren’t going to include in the bill a permanent extension of higher income limits that allow more low-income married couples to qualify for the refundable earned-income tax credit. So Republicans modified their bill by voice vote yesterday to include this extension.

The Joint Tax Committee estimated the original bill would save taxpayers $96 billion over 10 years, and the modified bill could increase the savings to $105 billion.

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