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The Corner

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Is There Really a Marriage Bonus?



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Forbes describes the modest new marriage penalties for the very wealthy in the new tax hikes, but balances it with this fairy tale:

Who are the lucky duckies for whom marriage will cut the tax? Couples with one spouse earning more than $200,000 and the other earning less than $50,000.

Consider again a simple case: a woman making $250,000 and her stay-at-home hubby. Unmarried, she owes the new tax on $50,000—$450. Married, that tax bill goes to zero. The savings derives from the $50,000 additional exemption that comes with marriage. That bonus shrinks if the husband starts working and goes away entirely if he makes more than $50,000.

The problem with this description (accurate of the tax code) is that it ignores the reality that by being married the husband with no income raising children is stripped of access to welfare, food stamps, and free health care for him and his kid.

Income splitting is not a marriage bonus. It’s simply a recognition that the couple are in fact a unit and need to be taxed on their joint earnings and not as if they were individuals, which they are not.



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