Senate Goes With Batt On Tax Change

Senate tax writers on Wednesday rejected the Housepassed solution for eliminating the so-called marriage penalty on the state income tax, opting instead for Gov. Phil Batt’s no-cost solution.

On a 5-4 vote, the Local Government and Taxation Committee cleared the way for the full Senate to substitute the governor’s no-cost proposal for the House version that would have reduced state tax collections by about $12 million over five years.

Batt, who had expressed reservations about the House approach, had recommended elimination of the $1,300 disparity in the standard deductions for single and married taxpayers in his State of the State address, saying it discouraged couples from getting married.

But because of the state’s tight financial situation, the governor proposed reducing the deduction for single people and raising it for married couples until it was equal.

The net effect at the top tax bracket was a $32 tax cut for married couples and a $41 increase for single taxpayers. Over 150,000 married couples would get a break, while about the same number of single taxpayers would pay more.