Proposals to end "Marriage Penalties" in tax laws and Social Security

Introduction and Links

[Note: This introduction is from before Congress passed the phase-out of the marriage penalty in marginal income tax rates, but I think it is still a useful introduction to the issue and to the broad range of marriage penalties that still exist in various forms.]

Lawmakers are considering ways to eliminate the "marriage penalty" in federal and state tax laws. Many couples, especially when both spouses work and earn roughly similar amounts, have to pay a lot more in income taxes than they would if they had not married. The burden on them and the resulting incentives are very real -- even though couples suffering a marriage penalty under the federal tax code are reportedly slightly outnumbered by those who get a marriage "bonus." (This statistic, however, does not even count people who remain unmarried because of marriage penalties! Other things to remember about the "marriage bonus" concept is that it only occurs in one of the areas where marriage penalties occur -- the federal income tax rate structure -- so it is often cancelled out by other marriage penalties. Also, a "bonus" compared to what? The "bonus" is not necessarily as effective or socially distorting an incentive as the penalty. It is unlikely to induce marriage, especially as it usually does not occur at the beginning of a marriage when both spouses work full time.)

There are also marriage penalties in the earned income tax credit, in many different tax deductions, and in social security benefits -- which are the primary reason why many older people live together who would otherwise get married. The cumulative effect is: 1) to increase the number of couples who do not marry because they cannot afford to, and 2) to encourage divorce lawyers to get their clients divorced as fast as possible and to discourage reconciliation attempts. Reconciliation attempts that fail can delay the divorce for an additional year, because of the way the waiting period provisions in the current divorce laws are written.

Americans for Divorce Reform supports a variety of federal and state legislation that would correct the marriage penalty. Changes in the tax code should aim for simplicity and rough fairness, and should not go so far to help marriage penalty victims that they increase the taxes of families with one primary breadwinner. However, insisting on perfect fairness would only mean that nothing can ever get done. Also, we must realize that reducing some people's taxes does not somehow penalize everyone else -- and taking less money from people is not the same thing as giving them something. Taxation is not a zero-sum game that assumes everyone's entire income belongs to the government in the first place. We are asking governments to stop burdening and marginalizing marriage, not to subsidize it.

-John Crouch