Taxes And Marriage
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Author | : Jane Gravelle |
Publisher | : Nova Publishers |
Total Pages | : 96 |
Release | : 2003 |
Genre | : Business & Economics |
ISBN | : 9781590335888 |
This book is an overview of issues associated with the marriage penalty. The first section explains how the marriage penalty (and the marriage bonus) arises and why it is not possible to achieve simultaneously the goals of marriage neutrality and horizontal equity across families in a progressive tax system. The second section discusses the size of the marriage penalty, the bonus and importantly, the notion that the marriage penalty is not a precisely defined measure. The next section outlines the issues of equity, efficiency and simplicity that are part of the frame work for evaluating policy and the final section discusses various legislative proposals in light of these objectives. The book also estimates the effects of current tax policies on families of different types and sizes and analyses proposals to address the marriage penalty and the child tax credit. It contains a history of the development of tax provisions affecting the family.
Author | : Edward G. Fox |
Publisher | : |
Total Pages | : 53 |
Release | : 2017 |
Genre | : |
ISBN | : |
The question of how to tax married couples has remained controversial since the adoption of the federal income tax over a century ago. The appropriate answer to this question depends in part on how sensitive couples are to taxes when deciding to marry. Yet we know surprisingly little about how taxes shape couples' marriage choices. This Article begins to fill that gap using a natural experiment generated by the halting shift in how the income tax treated married couples in the mid-Twentieth Century. The system moved from taxing married couples as two individuals--in which case marriage largely did not affect taxes--to taxing married couples on their joint income. At the time of this shift, joint taxation lowered couples' taxes upon marriage. The change to joint taxation, however, came later to some states, creating a natural experiment to study its impact on marriage rates. This Article shows that annual marriage rates increased by 9% in the relevant states after the introduction of joint taxation made marriage tax-advantaged, with affected men marrying 3 to 5 months sooner on average. This suggests that at any given time during this period there were tens or hundreds of thousands of married couples in the United States who would not have been married if not for the tax incentives. Couples appear to have been unexpectedly responsive to the tax changes given that unmarried cohabitation was not acceptable under the social mores of the day. If anything, Americans today are likely more sensitive to taxes when deciding whether and when to marry, suggesting that joint taxation continues to affect marriage decisions today. This in turn strengthens the case for returning to individual taxation of marriage if the goal is to avoid inefficiently distorting people's marriage decisions. By contrast, if the government wishes to encourage marriage, the results imply that using the tax code may be effective under some circumstances, but further analysis suggests that joint taxation remains a poor choice for doing so.
Author | : Stacy Dickert-Conlin |
Publisher | : |
Total Pages | : 64 |
Release | : 1997 |
Genre | : Income |
ISBN | : |
Author | : Carlyn S. McCaffrey |
Publisher | : Aspen Publishers |
Total Pages | : 508 |
Release | : 1995 |
Genre | : Law |
ISBN | : |
Author | : Sherwood Kohn |
Publisher | : |
Total Pages | : 95 |
Release | : 1997-06-01 |
Genre | : |
ISBN | : 9780788147630 |
Examines the ways in which federal tax law affects the income taxes that married couples pay & how demographic & labor market changes over the last two decades have altered those effects. It also discusses a variety of possible changes in the federal tax code that would reduce the higher tax liabilities that married couples often incur because they cannot file individual tax returns. Included in the appendixes are discussions on the tax treatment of married couples in other countries & under state income taxes. Charts & tables.
Author | : Hector Chade |
Publisher | : |
Total Pages | : 0 |
Release | : 2004 |
Genre | : |
ISBN | : |
This article analyzes the effects of differential tax treatment of married and single individuals in the United States on marriage formation and composition, divorce, and labor supply. We develop a marriage-market model with search frictions and heterogeneous agents that is sufficiently rich to capture key elements of the problem under consideration. We then calibrate the model and use it to evaluate the quantitative effects of several tax reforms aimed at making the tax law neutral with respect to marital status. We find that these reforms (i) systematically increase the labor supply of married females, with changes ranging from 0.3 to 10.1 percent; (ii) have substantial effects on the correlation of spouses' incomes, which changes from 0.2 to values between 0.185 and 0.334; (iii) can lead to either an increase or decrease in the fraction of people married, with changes that range from 0.6 to 2.4 percent.
Author | : United States. Congress. Senate. Committee on Finance. Subcommittee on Taxation and Debt Management Generally |
Publisher | : |
Total Pages | : 300 |
Release | : 1980 |
Genre | : Husband and wife |
ISBN | : |
Author | : Elias Ilin |
Publisher | : |
Total Pages | : 0 |
Release | : 2022 |
Genre | : |
ISBN | : |
We provide a new measure of the marriage tax - the percentage change in remaining lifetime (future) spending from marrying. (Equivalently, the increase in future net taxes divided by initial future spending.) We calculate this tax for young respondents to the 2016 Survey of Consumer Finance, impute the tax facing single young respondents to the 2018 American Community Survey (ACS), and study whether the tax alters the ACS respondents' decisions to marry. We control for endogenous spousal selection by assuming clone marriage - marriage to oneself. Our clone-marriage tax is comprehensive, intertemporal, and actuarial. It includes all key federal and state tax and benefit programs, weighing the present value of extra net taxes along each marital survivor path by the path's probability. The weighted average marriage tax - 2.69 percent - is very large, corresponding to a year or two of lost earnings for most singles. The range of clone-marriage tax rates - -74.4 percent to 45.8 percent - is equally remarkable. The average marriage tax rate is twice as high for the poor than for the rich and twice as high in some states than in others. Marriage taxation has a small overall impact on marrying, but a substantial impact for subgroups. Absent the tax, 13.7 percent more low-income, single females with children would marry annually and 7.5 percent more would be married by age 35. Our results are robust to assuming ACS singles marry higher- or lower-earning variants of themself and to adjusting for partial benefit takeup. Clearly, making each fiscal policies marriage neutral or using the federal income tax to annually adjust a couple's total net tax burden to ensure it's twice that of singles represent two ways to eliminate marriage taxation. An alternative, partial reform lies in adopting universal health insurance whose receipt is not income based. As we show, Medicaid and the ACA embed substantial marriage taxes.
Author | : United States. Congress. Senate. Committee on Finance |
Publisher | : |
Total Pages | : 22 |
Release | : 2000 |
Genre | : Husband and wife |
ISBN | : |
Author | : Daniel Feenberg |
Publisher | : |
Total Pages | : 22 |
Release | : 1994 |
Genre | : Husband and wife |
ISBN | : |
The new tax law increases tax rates of high income individuals, and expands the earned income tax credit for low income individuals. We use a sample of actual tax returns to compute estimates of the 'marriage tax' - the change in couples joint tax upon marriage - under this new law. We predict that in 1994 52 percent of American couples will pay a marriage tax, with an average of about $1,244; 38 percent will receive a subsidy averaging about $1,399. These aggregate figures mask a considerable amount of dispersion in the population. Under the new law, the marriage tax for certain low-income families can exceed $3,000 annually; for certain very high income families it can exceed $10,000 annually