Marriage penalty; tax cut to married couples

As a male raised by my mother since I was in third grade, I have to ask: what did I miss?

I don’t think divorce rates bear this out.

I cannot speak for you. I have no doubt that the combination of Ms. december and myself resulted in our daughters getting at least twice as much parental attention as either of us could have provided on our own. Maybe that means we made twice as many mistakes. :frowning:

My point is, if there were a tax advantage to staying married, rather than a tax disadvantage, there might be fewer divorces. (Or, maybe that’s just wishful thinking.)

Yes, I probably should resist the off topic discussion. I have a feeling this has been played out on these boards more than once (I’m just too lazy to do a search). However, I just happened to address this up in another board, so it is fresh. All data comes from http://www.irs.gov/pub/irs-soi/99in11si.xls

See, this isn’t the only board where you can have fun :slight_smile:

Interestingly the same issue of the marriage “tax penalty” came up in Spain and some guy went all the way to the supreme court which ruled on his favor on constitutional grounds of “equality before the law”. So, in Spain, married couples are entitled to file separately as if they were single. While the result might be desirable I find the logic of the ruling pretty bad. Equality before the law does not mean people in different situations should be treated the same. By that rule of three progressive taxation should also be unconstitutional.

  1. I haven’t presented any “equity” arguments, december. Indeed, my entire point is that there can be no equity. The tax system cannot be reformed so that all persons in the same economic situation will be treated equally - someone has to pay more taxes.

  2. Your interpretation is an incorrect one. ‘Marriage’ is not discouraged, or even affected, by the ‘marriage penalty.’ What is discouraged is marriage in which both spouses work and receive roughly equivalent pay - IOW career couples. Under the current system, if one of the parents stay at home with the kids, the couple receives a substantial tax benefit. That benefit would be lost if the system changed as you wish.

So, in essence, you are arguing in favor of latchkey kids. Odd, that. :wink:

Sua

I’m missing something huge here, which I’m guessing must be the big assumption underlying the whole disparity: Why tax married and single people differently at all?

Taking from Sua’s post, why not just have:

  1. The As are a single-worker family; Mr. A stays at home and makes nothing. Mrs. A makes $100,000/year.

Mrs. A is taxed at a single rate. Her individual tax is now $30,000. Mr. A pays nothing.

  1. The Bs are a two-income family, both making $50,000. Before they got married, their combined tax was $15,000. Now that they are married, they are each STILL taxed solely on their individual incomes. Mr. B pays $7,500 in tax on his $50,000, and Mrs. B pays $7,500 in tax on her $50,000.

  2. The Cs are a two-income family, one making $90,000, the other $10,000. Before they got married, their combined tax was $28,000, because the $90,000 individual income was taxed highly. Now that they are married, their total tax is the same. The on emaking $90,000 is still taxed highly, the one making $10,000 is still not taxed very much.
    Now that I dissect it, I guess the question is, why have the deduction for dependents at all? If someone wants to not work/work less, and their spouse (or for that matter, their unmarried sugar daddy/mommy) is willing to support them, why should the govt. care at all?

Eliminate the deductions on adult dependents, and even out the taxes.

December, the tax code is not about encoraging or discouraging lifestyle choices, but about getting revenue from those who can afford it while avoiding squeezing those who cannot.

What really burns me up about this issue if that the’Pubbies are using contradictory logic to give marrried folks with kids double, triple, quadruple helpings of tax relief while us singles get nothing.

Why are families getting per-child tax credits on top their existing deductions? Because raising kids is expensive. Well so is paying for housing on a single income! Members of two-income households have a lot of money left over after they split the mortgage payment, and this is what’s being taxed.

Of course, the big flaw is that the government is unable to identify those who are merely shacking up. But if the gov’t is going to stop taking into account one type of family arrangement which affects your disposable income, it shouldn’t with the other type too and should abolish the childless penalty along with the marriage penalty.

Right. And, I was agreeing with you.

Cute. Of course, it depends on which variable you focus on.

Most wives today have careers, whether they have children or not. For many (including my daughter and son in law) the second income is an economic necessity. So, the latchkey kid structure is a given, regardless of tax policy.

Toadspittle, look at your own results. Three couples, each with the exact same total income to live on - pay rent/mortgage, insurance, food, car, etc.

Yet the As pay $30,000 in taxes, the Bs $15,000 in taxes, and the Cs $28,000.

Does that make any sense?

Sua

I’ll try not to get started on this too much because it burns my buns. You might be able to convince me it’s fair to pay the same amount of taxes as a family with kids. The family with kids uses FAR more services than I do (school, parks, etc.) but, hey, it’s all part of society, right? However, why in bloody hell do I have to pay MORE in taxes than an equivalent family with kids?! I pay more taxes for their kids than they do! Grumble…grumble…grumble…

Get rid of all excemptions…child, mortgage interest, dependents etc…

It is an economic necessity only if we don’t change tax policy. Simple fix to encourage stay-at-home spouses - eliminate all taxes on income below $100,000, so long as parent stays at home with the kids. For families making less than $100,000, provide EITC’s to make up the difference. Increase the tax rate on singles and double-income married folk to make up for the shortfall.

Simple.

Of course, at this point, some real conservative might pipe up and say that, perhaps, tax policy should not be used to enact social policy. Is there such a conservative in this thread?
:crickets chirping:

Sua

I agree with the thought, everyone should have to file as if they were single since the government shouldn’t have a hand in marriage at all, neither encouraging it nor discouraging it (nor defining it in such a way as to favor one brand of sexual preference over another).

Hmmm, should I be winking at Sua now?

Unfortunately, perfect non-favoritism is not possible. E.g., California is a joint property state. If the wife earns $100,000 per year and the huband earns nothing, their individual earnings are deemed to be $50,000 each, a court has ruled. So, this couple would gain an advantage by being married, even if both filed as if single. OTOH, if the same couple lived in a non-joint property state, they would not gain this advantage.