Academic journal article
By Carpenter, Floyd W.; Lassila, Dennis R.; Smith, L. Murphy
Journal of Legal, Ethical and Regulatory Issues , Vol. 16, No. 2
Marriage penalty (Taxation)--Influence
Marriage penalty (Taxation)--Research
Marriage penalty (Taxation)--Laws, regulations and rules
Income tax--Forecasts and trends
Public policy (Law)--Interpretation and construction
Tax law--Interpretation and construction
Research studies on public policy such as tax and transfer programs have revealed their negative impact on marital stability. One of the most negative aspects of tax law is the marriage penalty tax (MPT). The current study analyzes the cost to individuals of various aspects of the MPT, and consequently, how it discourages marriage and how it harms both individuals and society at large. The decline of the family, especially regarding married couples, is considered one of the critical problems facing American society. Past research indicates that the MPT, due to its negative impact on marital stability and two-parent families, results in significant costs to individuals, and leads to major social and economic costs, such as higher rates of children living in poverty, lower education, higher unemployment, more crime, and poorer public health.
Considering its harmful impact on individuals and to society, the conclusion is that the MPT should be eliminated from the tax code. Those opposing repeal of the marriage penalty have argued that 'higher-income' taxpayers receive a disproportionate amount of the tax reduction. However, findings of this study indicate that the MPT has an equally negative effect on couples in the lowest income categories, especially regarding the earned income tax credit. Further, elimination of the MPT only reduces taxes for married couples, not single taxpayers; thus, married taxpayers receive a 'disproportionate' benefit relative to single taxpayers.
President Lincoln is famous for saying that foreign invaders could never destroy America but that America could be destroyed only if Americans themselves were the author and finisher of their own destruction (Lincoln, 1838). Marriage and families are regarded as building blocks of civilization. Winston Churchill observed: "There is no doubt that it is around the family and the home that all the greatest virtues, the most dominating virtues of human society, are created, strengthened and maintained" (ThinkExist, 2012). Yet, in America, numerous parts of the federal tax code, directly penalize marriage and thereby have a detrimental effect on American families.
Regardless of a couple's income level, logically, the couple should not have to pay more taxes, simply for the reason that they are married, as opposed to simply living together unmarried. Many studies on family structure that control for variables such as race, education and income level, have found that children raised in married two-parent families have better outcomes on average than children raised in other settings (Coverdale, 2007; Deleire & Kalil, 2002; Demuth & Brown, 2004; McLanahan, 1996; Morse, 2003; Parker & Johns, 2002). By its financial disincentives, the MPT is anti-marriage and anti- family; consequently, the MPT is harmful to children and to all of society. The family unit is the bedrock of civilization; if families decline, civilization will break down (Feucht et al., 2009; Feucht et al., 2008; Hagelin, 2007; Heritage Foundation, 2012b). Tax laws, as part of public policy, should foster, not hamper, two-parent families and their corresponding economic benefits such as improved employment, better public health, and lower crime.
The marriage penalty tax is typically defined as the excess of (1) the amount of income tax that a married couple would pay using the filing status of married filing jointly minus (2) the combined amount of income tax that two single (unmarried individuals) would pay filing as single individuals. MPTs are generally largest when the spouses have equal or nearly equal amounts of income. On the other hand, a marriage bonus tax (MBT) is said to exist when the (1) combined amount of tax that two single individuals have to pay is larger than (2) the amount of tax paid by a married couple filing a joint return. MBTs are generally largest when one spouse in a married couple generates all or nearly all of the couple's total income. …