The Effect of the Tax Code on Marriage

Flickr image by Orin Blomberg.

Marriage and family stability should be encouraged so that children may have the opportunity for a better future. However, the effects of the tax code penalizes marriage. Low-income workers, being more likely to be subject to the marriage tax penalty than middle or high income workers, could be driven to not get married at all or divorce due to more unwanted financial stress (Fichtner and Feldman).

Why would a household with two people each earning the same amount of income (ex. $50,000 annual income per individual) be taxed more than a household with two people each earning different incomes (but still earning a total of $100,000 annually)? Government, it seems, threw being “fair” and promoting “equality” out the window when instituting the tax code. Jason Fichtner, a senior research fellow and Jason Feldman, a research analyst, both under the Mercatus Center, calculated that “For many middle-class families, the tax brackets for married couples filing jointly for any given tax rate is roughly twice the amount as a non-married worker, thereby subjecting more income to a lower tax rate.” While a single-earner household earning $60,000 a year could take home a $3,465 “marriage bonus”, a two-earner household, each person earning $30,000 a year, could be subject to a penalty of $1,083 (Fichtner and Feldman).

To encourage women to stay in the labor force after having children, Obama has two proposals: adding a new tax credit for second earners and tripling the existing tax credit for child care expenses. There are two reasons that the proposal of adjustments to the tax code is “justified” by lawmakers. The first is that because two-earner households would naturally incur higher living costs vs. single-earner households with the same income, two-earner households should be taxed more. But since single-earner households earn less, and because the labor would be divided inefficiently, the first justification doesn’t make sense. The second reason is to keep the tax code progressive, and when applied to families, penalizes marriage which also doesn’t make sense (Ponnuru).

So the tax code, adjusted or left alone, is discouraging marriage. Politicians, wanting to keep women in the labor force and coming up with policies for that purpose, would still and are at present discouraging them from working, and marrying for that matter (Ponnuru).

As with other government policies, the tax code, by penalizing marriage, hits low-income people hard in addition to penalizing high-income people (Fichtner and Feldman). Households with two adults and no dependents are very likely to incur the marriage penalty if annual income is fairly equal or very equal and between $10,000 and $20,000 or between $350,000 and $1,000,000 – obviously burdening the poor as well as well as taxing the rich more while the middle class will likely receive a marriage bonus (Kasprak).


If households are made up of two adults and one dependent and incomes are relatively equal or close to equal, households with an annual income between $30,000 and $60,000 are fined heavily for being married, especially at around $40,000 a year, in addition to households with an annual income between $500,000 and $1,000,000. Once again, hitting the low-income people hard and subjecting the high-income people to more taxes (Kasprak).


And oddly enough, if households with two earners with fairly the same incomes or close to the same incomes have two dependents and earn between $15,000 and $70,000 a year, are penalized heaviest among people having no dependents, one dependent, and two dependents. People earning between $500,000 and $1,000,000 are likely to incur a marriage penalty as well if the earners have fairly the same incomes or close to the same incomes (Kasprak).


To summarize, Richard Morrison of the Tax Foundation explains what is going on: “Marriage penalties tend to affect low income and high income couples, but not middle income ones—low income couples because of the marriage penalty inherent in the structure of the Earned Income Tax Credit (EITC) and high income couples because the 28 percent rate bracket and above for joint filers begins at less than twice the amount for single filers. Middle income couples are much more likely to receive a marriage bonus simply because there is no penalty inherent in the bracket structure for the 25 percent rate levels and below—for joint filers, each bracket begins at exactly twice that for single filers” (Morrison).

Staying true to its design, the marriage tax discourages work. A stay-at-home member of a family receiving a bonus is discouraged from returning to work because joint-filing says that for the stay-at-home family member to return to work, he or she must be subject to the tax rate of the other head earner’s next marginal dollar of income – for example, if the other head earner’s income was $60,000 – the rate would be 25%, instead of the single filing rate of 10%. “Although married individuals have the option of filing separate tax returns, filing under the tax status ‘married filing separately’ imposes limits on tax deductions, narrower tax brackets, and higher marginal tax rates” (Fichtner and Feldman).

Two-worker families with relatively the same incomes have the choice of earning less income and being married, or being married and earning less income, but probably providing a more stable home for children (Fichtner and Feldman).


Mainly, the low-income people are ironically, hit the hardest by the marriage penalty, even though the rich people are subject to the marriage penalty as well (Morrison). Importantly, if people are concerned about reducing poverty and helping low-income people and encouraging family stability, they should be concerned about the tax code. Discouraging work by taxing income and stability by a gap between who is taxed depending on if you’re married and have fairly similar or very similar annual incomes and how many dependents you have is a burden that will not help low-income families out of poverty. The solution, not to poverty, but to alleviate the tax burden, is to allow families the choice of filing taxes as single or married – without penalties – tax status should remain neutral regarding marital status. This allows the opportunity for more people to flourish and from there, allow their children to flourish (Fichtner and Feldman).




Fichtner, Jason and Jacob Feldman. "Eliminate the Marriage Tax Penalty." US News 18 September 2012: 1. web. 4 March 2015.
Kasprak, Nick. "Marriage Penalties and Bonuses (Families with Children Edition)." Tax Foundation 29 August 2013: 1. web. 4 March 2015.
Morrison, Richard. "Tax Code's Marriage Penalty Varies Greatly with Income." Tax Foundation 10 January 2013: 1. web. 4 March 2015.
Ponnuru, Ramesh. "Obama's War on Homemakers." American Enterprise Institute 22 January 2015: 1. web. 3 March 2015.