Taxes and the “Marriage Penalty”

by Barbara Ray

Six hours to get your taxes filed…  On this tax day, we take a look at the pros and cons of the “marriage penalty” that’s built into our tax code. The New York Times’ “room for debate” column features several voices, including the Knot Yet author and marriage scholar, Brad Wilcox. Here’s a recap:

First, some background. The marriage penalty applies largely to two-worker couples. Two taxpayers each earning $100,000 pay $879 more as a married couple than as two singles.But if one spouse stays home, the penalty disappears. For a individual making $200,000 and whose spouse does not work, their combined tax liability would be about $6,665 less than if they filed singly.

Based on this, Melissa Murray and Dennis Ventry, both law professors, want to get rid of the penalty:

The marriage penalty needs to go. It’s a throwback to the days when women were homemakers and men were breadwinners. It discourages dual-income couples from getting or remaining married, while thwarting efforts to create a more inclusive and egalitarian society.

Likewise, law professor Edward J. McCaffery thinks the tax law penalizes the poor and favors the wealthy, who can afford to have a stay-at-home spouse.

This perpetuates a sense that this is somehow the “ideal” way to live, and helps to keep women under a glass ceiling, locked into middle-class jobs.

Will Wilkinson, a blogger at The Economist thinks government shouldn’t be in the business of nudging us toward preferred behavior:

We need government to maintain a framework within which free choice is possible, not to nudge us toward the “right” choices. We’d be indignant were there tax credits for voting Republican, or tax penalties for Catholics, because we rightly believe that government ought to remain neutral in matters of conscience. Our choices about marriage and family are no different, and no less weighty. We treat one another with due respect by treating everyone equally, and that means keeping the tax code out of it.


Joan Entmacher of the National Women’s Law Center, says essentially, eh:

In 2001, changes in tax law generally reduced marriage penalties and increased marriage bonuses, but the steady decline in marriage rates continued. Same-sex couples are fighting for the right to marry — even though many will pay higher income taxes than they do as singles.

But she adds,

The steepest marriage penalties are experienced by low-income couples because eligibility for need-based programs is determined by combined income, and most benefits are cut back sharply as income rises. For some low-income couples, marriage penalties can approach or even exceed 100 percent: that is, the loss of benefits like child care, food, housing and tax assistance is greater than the increase in household income.

Brad Wilcox also argues for watching out for the poor.

Given the fact that marriage benefits higher-income couples in a wide range of other ways — be it workplace health and pension benefits, insurance rates or myriad other factors — I don’t think Congress should focus its limited attention and resources on addressing the marriage penalties facing more affluent couples.

A fix, he says is to simply double the thresholds for the tax brackets for married filers over single filers, but more important, use the tax system to shore up the economic foundation for poor and working-class families. Financial security, he argues, can help increase marriage among the very families where marriage has fallen off so dramatically.

In the end, how many people make this calculation at all? It seems like the last thing on your mind when considering whether you want to spend the rest of your life with a person. But then again, dating today is brutal. Young adults are regularly checking each other’s credit score before going on a second date. So who knows.