March 27, 1999
WHY IS MARRIAGE A ''SIN TAX?''
''Sin taxes'' on cigarettes or
liquor discourage the harmful behavior of smoking and drinking. Some states
recently increased cigarette taxes by 25 cents a pack to reduce teen
But why is there a federal ''sin
tax'' on marriage?
Is this a harmful behavior that we
want to discourage? Of course not.
People who are married live longer,
earn more, and are twice as likely as single people to be ''very happy.''
And children of married parents are
only half as likely to drop out of school or become delinquent compared to
children of single parents. Kids from broken homes are three times as likely
as those from intact homes to become pregnant as teenagers and are six times
more likely to commit suicide or to be in poverty.
Yet 21 million married working
couples pay an extra $1,400 in federal income taxes, on average, for being
married compared to couples who have the same income, but cohabit rather
than marry. This is what is called the ''marriage penalty'' in tax law.
Marriage is a sin to be taxed.
Sam is a machinist who earns
$31,500 and lives with Susan, a teacher who also earns $31,500. After
claiming a standard deduction and a personal exemption, each of their
taxable incomes are $24,550. So each pays a federal tax of $3,682.50,
or $7,365 total.
However, if they marry, their
federal tax bite jumps to $8,635. That's a $1,270 sin tax.
Why are married people taxed more?
A single person pays a 15 percent
tax on income up to $25,350. So a cohabiting couple can earn up to $50,700
and remain in the 15 percent bracket. But a married couple is in the
15 percent bracket only if their combined income is under $42,350.
They must pay a 28 percent tax on all earnings above that amount.
Also, the standard deduction of a single person is $4,250, but a joint
return can claim only $7,100, rather than double the $4,250, or $8,500.
Sharon Mallory, a 41-year-old
factory worker from Indiana told the House Ways and Means Committee that if
she were to marry her live-in companion, Darryl Pierce, they would have to
pay $3,700 more in taxes. ''Darryl and I love each other very much and
want to be married,'' she testified. ''The IRS won't let us. We're victims
of the marriage penalty.''
This is evidence that in ''the tax
code discourages marriage,'' as Leslie Carbone of the Family Research
Council puts it. Economists James Alm and Leslie Whittington
have reported that the probability of marriage falls as the marriage tax
Federal tax law is one reason
marriage rates have fallen 41% since 1960, and the number of cohabiting
couples has soared TEN-FOLD from 430,000 to 4,236,000 in the same time.
Cohabitants are saving money, but
they will lead shorter lives. The odds of a cohabiting man who is aged
48 living till age 65 is only 61%. But a married man has an 85% chance of
being alive at age 65, according to Linda Waite of the University of
Fortunately, there is a new
bipartisan push to remove much of this marriage penalty. A bill, the
''Marriage Tax Elimination Act, has been proposed by Reps. David
McIntosh (R-IN) Jerry Weller, (R-IL), and Pat Danner (D. MO). It would
double the current standard deduction of $4,150 for singles, to $8,300 for
married couples, up from the current $6,900 for married couples.
And the Marriage Tax Elimination
Act would also extend a married couple's 15% tax bracket to $49,300, up from
the current maximum of $42,350. That would protect nearly $7,000 from
the higher 28 percent tax rate.
A similar bill passed the House
last year, but was defeated in the Senate. The odds look better this
year for passage, partly because House Speaker J. Dennis Hastert, (R-IL),
has made the bill a top priority.
''It's ridiculous that our onerous
tax code makes it more expensive to be married than to be single,'' Hastert
says. ''The government should not punish married working couples by taking
more of their hard-earned money in taxes than an identical couple living
outside of marriage.''
Will the Marriage Tax Elimination
Act eliminate marriage taxes?
No. It will knock off only 55.6
percent of them.
The Earned Income Tax Credit, which
reduces income taxes of low income workers, accounts for another 19 percent
Denise is a single mom with one child, with an adjusted gross income of
$20,000. So she gets a $1,038 refundable tax credit. Bill, who
lost his wife to cancer, and earns $22,000, is eligible for a EITC of $771.
But if they marry, they will lose their EITCs, with a combined income of
$42,000. They will pay an added $1,749 in marriage sin taxes.
There are still 61 other smaller
Clinton opposes the marital
reforms. But then he doesn't believe much in marriage.
Do you? Will you write your
Copyright 1999 Michael J. McManus.