Reducing Income tax paid for married couple

Item from the Smart Marriages Archive, reproduced in the Divorce Statistics Collectio n

THE DAILY OKLAHOMAN

September 8, 1999, Wednesday CITY EDITION

EDITORIAL

Wedding Bliss Nixing 'Marriage Penalty' Erases Tax Inequity

THE so-called "marriage penalty" means more to social
conservatives than merely ironing out an inequity in the tax code.
It's a case where public policy and traditional American values
collide.

As such, a provision reducing the marriage penalty is the part
of the $ 792-billion, 10-year tax-cut bill passed last month by
Congress with the best chance of becoming law.

President Clinton is poised to veto the overall package, but he
has said something should be done about the marriage penalty. So
even if the overall bill dies in stalemate, the marriage penalty
provision, costing $ 119 billion over 10 years, might succeed later
on its own.

The provision would reduce the extra amount of income tax a
couple pays beyond what would be paid if they lived together
unmarried. A Congressional Budget Office study estimated 21 million
couples each paid an average of $ 1,400 in marriage penalties in 1996.

Leslie Carbone of the Family Research Council said marriage
penalties result from 66 different tax-code items. The standard
deduction and income tax brackets account for more than half of them.

It's pretty simple. The standard deduction for married couples
filing jointly is less than two times the deduction for a single
filer or for a person claiming head-of-household status. Thus
marrieds can't claim as large a deduction in computing their income
taxes as they could if they weren't married.

The tax brackets contain a similar disparity. Income thresholds
that push taxpayers into higher brackets for joint filers are less
than twice that of single or head-of-household claimants. Marrieds
are forced into higher brackets at lower income levels than two
people filing separately. The tax-cut bill addresses both. It would
gradually increase the standard deduction for joint filers to twice
what is available for single taxpayers between 2001 and 2005. Also,
the upper boundary of the lowest tax bracket for joint filers would
be increased slowly, to $ 51,500 between 2005 and 2008.

Currently, two-income couples who roughly earn the same salary
are hardest hit. Because African-American wives are more likely
than white wives both to work and to earn incomes equal to their
husbands', the black community suffers an even greater impact,
Carbone says.

Still, the marriage penalty is more than easing an inequity.
It's about the culture and traditional values. A 1995 study by a
pair of economists found that the probability of marriage falls as
the marriage tax rises. Statistics show nonmarital cohabitation is
increasing, from less than 500,000 couples in 1960 to more than
four million in 1997. Certainly there are lots of reasons, but the
marriage penalty is one of them.

Opponents say fixing the problem is expensive and wouldn't help
married couples that much. That's Washington speaking: Tax money is
the federal government's to spend, not a gift from taxpayers for
vital institutions. Those who scoff at a tax break of a few hundred
dollars probably don't do their own grocery shopping.

The tax code shouldn't hit people in the wallets for committing
themselves to marriage, the cornerstone of families - the breakdown
of which is the source of many of society's ills. Reducing the tax
penalty on marriage is the right thing to do. It might even boost
broader efforts, such as that of Oklahoma's Gov. Frank Keating and
his wife, Cathy, to shift both public policy and the culture in a
marriage-friendly direction.

After Congress reconvenes today, sending the tax-cut bill to
Clinton likely will be one of its first actions. We hope Clinton
will reconsider his veto threat, sign the bill and give Americans
the broad relief they deserve for overpaying Washington with their
taxes.

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