A new marriage penalty created by the controversial 2017 federal tax cuts needs to be fixed, according to Maine’s senior senator, Republican Susan Collins.

The 2017 Tax Cuts and Jobs Act, which slashed federal taxes by more than $1.5 trillion, created a problem in states like Maine that impose hefty local and state taxes.

The measure allows taxpayers to claim up to $10,000 in itemized deductions for state and local taxes — generally income and property taxes — but it does not allow married couples anything more than a single filer.

Sen. Susan Collins

What that means, Collins told colleagues recently, is the revised tax code now creates “a bias against marriage.”

“A couple could be financially better off not getting married,” she said as she argued for a change that would “remove the marriage penalty” by doubling the deduction for joint filers.

Collins introduced a bill to fix the problem created by the tax bill, but it is not clear GOP lawmakers are keen to help people in high-tax states pay less to a cash-strapped federal government.

Her SALT Deduction Fairness Act was referred to the Senate Finance Committee for review. It has no cosponsors, a sign that its prospects are dim.

The Democratic-controlled House, though, is eyeing legislation to remove the cap entirely or to raise it substantially to assist people in states with high taxes.

U.S. Rep. Brad Schneider, an Illinois Democrat, told Crain’s Chicago Business the House might act as soon as the end of the year to repeal or raise the cap on how much can be deducted for local and state taxes.

Republicans have treated the idea skeptically in the past, with many uninterested in providing relief to mostly Democratic states.

U.S. Sen. Ron Wyden, an Oregon Democrat, said on the Senate floor last month, “Republicans deliberately targeted middle-class homeowners in states like New Jersey, New York, Maryland and Oregon for tax increases” to help pay for the big tax cuts they delivered to American’s corporations and wealthy individuals.

The origin of the marriage penalty Collins aims to fix lies in a section of the tax law approved late in 2017 at her request.

During debate on the controversial tax bill, Collins said she fought to keep the state and local tax deduction “because of the incredible tax burden a complete elimination of this deduction would have imposed on American taxpayers, many of whom pay high taxes on everything from their incomes to their vehicles.”

The tax bill in general sought to eliminate many of the deductions that have piled up over the years and, by raising the standard deduction, make it less likely people would save money on their tax bills by using them.

Collins argued at the time that “families in high-tax states like Maine” should be able to continue to deduct their local and state taxes. She convinced the Senate to allow up to $10,000 in deductions for those taxes, a move that saved money for taxpayers who continued to itemize.

But it did not take note of the fairness of imposing the same $10,000 limit on both single and married filers.

As a result, Collins said, “a basic unfairness still exists in the tax code that penalizes married couples.”

It is a problem that Augusta Mayor David Rollins noted the day the tax bill passed.

In a prepared statement for the Mayors’ Coalition on Jobs and Economic Development, Rollins said at the time that the provision “contains a severe marriage penalty” by having the same cap for single and married filers. He expressed surprise “such an obvious inequity was not addressed.”

Collins is trying to address it now.

“This straightforward change would remove a bias against marriage from the tax code,” Collins said, and “most important, it would help make the dream of home ownership a reality for married couples.”

Collins said the National Association of Realtors recently urged her to push the issue as a way of helping people buy homes.


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