A new plan floating around Congress would provide tax cuts to married couples, the self-employed, estates and investors. The proposal comes from the House's Conservative Action Team lead by Representative David McIntosh.
Under the plan, the top tax rate for long-term capital gains would fall from 20 percent to 10 percent by 2005. Lower-income taxpayers would, in some cases, see their capital-gains tax rate fall from 10 percent to 8 percent as early as 2000.
The legislation would also repeal provisions in the tax code designed to insure that high-income taxpayers and corporations pay at least a minimum tax. These provisions are extremely complex and would be scrapped. The plan would also abolish inheritance taxes and increase the annual contributions to individual retirement accounts from $2000 to $5000 a year.
The plan would also immediately increase the standard deduction for married couples to twice that for a single person. Currently the deduction is $4300 for singles and $7200 for married couples. This creates what many call a marriage penalty tax for dual-earner couples.
The plan would also increase the tax brackets for married couples to twice that for a single taxpayer in 2005. The proponents of this plan believe that these various tax changes would eliminate the marriage penalty tax and save 21 million married couples an average of $1400 per year. Some critics believe that the savings might not be quite that high but do acknowledge that it will significantly reduce the marriage penalty.
At a time when government is beginning to run a surplus, it's encouraging to hear some in Congress talk about a tax cut. In the midst of discussions about investing in Social Security and Medicare, let's not forget those who made the surplus possible: the taxpayers.
I'm Kerby Anderson of Probe Ministries, and that's my opinion.