March 27, 1999
Column #917

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 smoking.

     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 rises.

     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 Chicago.

     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 marriage taxes.

     Clinton opposes the marital reforms.  But then he doesn't believe much in marriage.

     Do you?  Will you write your Congressman?

Copyright 1999 Michael J. McManus.