Item from the Smart Marriages Archive, reproduced in the Divorce Statistics Collection
Last week the Wall Street Journal took dead aim at people like Rep. David
McIntosh (R-Ind) who insist tax cuts should help end the marriage penalty.

Social conservatives, complained the WSJ editorial, want "to increase the
incidence of the marriage bonus." The marriage "bonus" is how a misguided
but influential Congressional Budget Office study refers to the fact even in
one-earner marriages, the IRS allows both spouses to take a personal
deduction, because (surprise!) they are both people. This is not paying
people to marry; it is a fair adjustment for family size.

But according to the WSJ, what pro-family groups want to do "not materially
different than what K street lawyers did in Gucci Gulch-- carving out one
piece of the tax code for some loud interest's benefit."
I don't mean to pooh-pooh concerns about littering the tax code with special
interest deductions. I'm a supply-sider. I favor a flatter, fairer tax code.
But describing marriage as a "special interest" borders on the
[itals ] demented.[end itals] Clearly some brilliant folk have not thought
very hard about what marriage really is. Let me try to spell it out out, in
terms even the green eye-shade crowd can understand:
Among other things, marriage is an economic partnership. Being a partnership
in the whole of life, , marriage produces many different sorts of goods, some
of which end up being measured in the GDP immediately (like fatter bank
accounts), some of which take a while (like healthy children, aka future
taxpayers), and some of which never do (true love).
The evidence that marriage boosts productivity is overwhelming, as University
of Chicago Prof. Linda Waite and I point out in our forthcoming book, "The
Case for Marriage:: "The wage premium earned by married men is one of the
most well-documented phenomena in social science-Husbands earn at least ten
percent more, and perhaps as high as 40 percent more than similar single
men." Married men earn more both because they work longer hours, and because
they just produce more than single men with similar work and education
histories.
When it comes to managing money, marriage is even more helpful. At any given
income level, married couples are much less likely to experience "economic
hardship" --to say they sometimes lack the money to pay bills. Like business
partners, marriage partners encourage each others' economic efficiencies and
discourage impulse purchases. More home production (shopping for bargains,
home-cooked meals, arguing with insurance companies) translates into more
savings to invest in the stock market.

Marriage thus boosts wealth for some of the same reasons that other sorts of
financial partnerships create wealth: they allow individuals to specialize
and trade goods over time, making each partner more productive. The IRS
permits business partners to decide how to split income for tax purposes,
precisely because figuring out exactly which partner "earned" what income is
just too hard, given the myriad, hard-to-unscramble ways partners contribute
to each others' productivity.
So, too married partners.
So even if the [itals] only [end itals] thing you care about is
keeping the tax code from distorting economic activity, you have to care
about the marriage penalty. At the very least, you should want marriage
treated no less favorably than other partnerships, allowing spouses to split
incomes.
The worst solution is to do what the Senate proposal would do: allow
married couples to file as individuals. This benefit, available only to
two-earner couples, creates a very large tax penalty for doing what most
married families do so productively: have one partner specialize (to some
extent) in home production, and the other in market labor. The Senate bill
thus creates a "homemaker penalty" that would both increase the illegitimacy
rates (by lowering married childbearing) and boost slightly the divorce rate
(since marriages with two full-time workers are particularly divorce-prone).
Can anyone spell disaster?

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