Love, marriage, and taxes.

• Author: Schnepper, Jeff A.

Candidate Clinton promised a middle-class tax cut. Pres. Clinton has negated his original offer and proposed a middle-class tax increase in the form of an energy tax. Tax revenues always have come from the middle class and always will. While the income of the "rich" may be substantial, they are too few to pay the nation's bills.

Nevertheless, pay they will. Taxpayers in the top bracket will see their rates soar from 31% to 36%. That's just for taxpayers with an adjusted gross income of more than $115,000 and couples with a gross income in excess of $140,000. As a result, this tax will hit only about 1.5% of the population.

However, that group will be hit hard. On top of the five percent increase, there is a proposed 10% surcharge on incomes exceeding $250,000 that will add another 3.6% to the top bracket. Both of these taxes are slated to be retroactive on income earned since Jan. 1, 1993.

Beginning in January, 1994, the same people will find themselves paying another 1.45% on any gross income over $135,000 in the form of Medicare payroll tax increases. Moreover, the alternative minimum tax is scheduled to increase as well. Even before they begin paying their share of increased energy and corporate taxes, the top 1.5% of the taxpaying population will be hit for an additional 10% more in taxes.

The marriage penalty

The President's plan, therefore, appears to be extremely progressive. The proposed tax package also magnifies the marriage penalty for wealthier two-income couples. For instance, the new 36% marginal tax rate applies to married couples after their taxable income reaches $140,000, but for single individuals starts at $115,000. What this means is that two unmarried people could have a combined taxable income of $230,000 before they both jump to the 36% bracket from 31%. A married couple with the same $230,000 of combined income would pay $4,500 more in income tax than if they were single.

Moreover, the proposed tax law change also would impose a 10% surtax on regular taxable income over $250,000 for both individuals and married taxpayers. As a result, if two individuals with incomes of $150,000 each married, they would pay a surtax on $50,000 of their combined $300,000 income. Yet, two single taxpayers living together each could have an income of $250,000-for a combined total of $500,000 - without becoming subject to the tax.

Let's look at an example of the magnitude of the changes. Two individuals with incomes of $140,000 each...