If ever there was a tax change that equated with simple justice, it is the one being pushed now by five of the U.S. Senate's seven female members. We're referring to the bill that would give homemakers the same deduction for Individual Retirement Accounts that working spouses can claim.
As matters now stand, workers can set aside up to $2,000 a year in an IRA, which is a savings plan with earnings that are not taxed until they are withdrawn. Couples with two incomes can contribute $4,000 a year to such plans, but one-earner families are limited to IRA contributions of $2,250.The new proposal would give couples with only one income the right to the full $4,000 contribution. Rules allow workers not covered by an employer-sponsored pension plan and making less than a certain amount - $40,000 for a couple filing a joint return - to deduct the full IRA contribution.
As Sen. Barbara Mikulski, D-Md., puts it: "Work is work whether it's done inside the home or outside the home." Her measure "acknowledges the value of motherhood and . . . that the work that is done in the home is important to American society."
Absolutely right!
The bill would also help soften the harder tax blow sustained by married couples. On the grounds that two can live more cheaply than one, the federal government has long taxed married couples at a higher rate than single people. That disparity has worsened under the 1993 tax law, which creates "a huge disincentive to marriage," according to researchers at Tax Analysts, a non-profit organization in Arlington, Va., that publishes tax information for the public.
In any event, Scripps-Howard News Service reports that the Mikulski measure has bipartisan support even though it would cost $105 million over five years and comes at a time when Congress is trying to rein in spending. By Washington standards, this is a paltry sum that could be made up by tolerable budget trims elsewhere.
Besides, simple justice ought to count for something. Or is that expecting too much of Congress and the tax collector?