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Thursday, January 28, 2010

CRS Issue Statement on Individual and Family Tax Policy

Jane G. Gravelle, Coordinator
Senior Specialist in Economic Policy

Raising revenue to finance the federal government is a fundamental constitutional responsibility of the Congress. And, in dealing with the federal tax system, Members recognize that beyond funding the government, the tax system significantly affects individual taxpayers as well as the economy as a whole. Further, as with previous Congresses, the 111th Congress will undoubtedly be mindful of the need to seek equitable treatment of families in any tax changes they contemplate. 

In crafting tax provisions affecting families, Congress is likely to focus on the incentive (and disincentive) effects generally associated with family oriented tax policy as well as equity concerns. The tax legislation passed in the 107th, 108th, and 109th Congresses included a variety of family tax related provisions (in addition to reducing individual income tax rates and adding a 10% income tax bracket amount). In particular, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, P.L. 107-16) changed the bracket amounts and standard deduction for married couples filing jointly and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA, P.L. 108-27) accelerated the increase in the child tax credit. The rate brackets and deduction amounts were adjusted by Congress to eliminate the so-called "marriage penalty," which in turn increased the companion "marriage bonus."

Date of Report: January 6, 2010
Number of Pages: 4
Order Number: IS40331
Price: $7.95

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