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Dr. Helen

They say two can live cheaper than one but I never believed this. In this CNBC article, there is discussion of the marriage penalty and how it can be expensive at tax time to be married for some:

Some wealthy and low-income married couples are losing out at tax time, but experts say eliminating the so-called marriage penalty is more complicated than you might think.

“It’s just impossible to get rid of it with the tax system that we’ve got,” said Roberton Williams, senior fellow at the Tax Policy Center think tank.

That’s because the U.S. tax system is progressive, meaning that people pay more taxes as their incomes go up, and also factors in whether people are married or single when it comes to filing taxes.

Williams suspects that more couples get a marriage bonus than a marriage penalty, meaning that their overall tax bill is lower because they are married. But he said there’s no question that some people would have a lower tax bill if they were single instead of married. ….

Some same-sex spouses will be getting a bonus or paying penalty for the first time this year, because this is the first tax season that the Internal Revenue Service is recognizing those unions. Cain said tax implications are not keeping same-sex couples she knows from getting married in states where it is legal.

“Most of the people I know say it’s the price of equality,” she said. “We get to get discriminated against in the tax system just like opposite sex couples.”

Notice that when “equality” means progressive politics and increased taxes, suddenly marriage is a good thing and no one stops to think about the incentives much. Really?

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All Comments   (7)
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"They say two can live cheaper than one..."--Dr. Helen

I don't know who "they" are but the saying (regarding marriage) I heard in my younger years was "two can live as cheaply as one".
31 weeks ago
31 weeks ago Link To Comment
Well, I'm single and now self-imployed. I have to pay the whole nut in social security taxes, because there is no employer contribution--I am my employer.

When I was a teacher, I always got a refund, a couple of hundred dollars every year. Now I have to write a check for several thousand dollars and send it to the IRS, with no hope of any return. There are deductions of course, for gas, mileage, business expenses, that lower my taxes, but I'm paying a hell of a lot more in taxes now that I'm self-employed. And I'm telling you, it really hurts to write that check every April 15.

When I was employed, the taxes were simply taken out of my paycheck, sort of a hidden tax. But at least I got a refund. Today I have to keep track of everything and write a check to the IRS for thousands of dollars.

I can't even imagine what my taxes would be if I were married. I'm sure there would be some deductions, but seriously I'd be screwed financially.

But you don't want to mess with the IRS. When I was a kid, my mother called me to the office and asked me to help her put up some signs. It was summer, and I really didn't have anything esle to do so I said, sure.

I pulled up and parked in front of the office. This woman, Barbara, who was one of the realtors, pulled up and parked behind me. Then these men in black--no, really, men in black--got out of the car across the street and came towards us.

I thought they were coming for me and I froze. I kept thinking, who's daughter did I upset? But they walked right past me, grabbed Barbara, handcuffed her, took her to their car, and drove away.

Just like that, all in a minute. Then my mother came out with her signs, and I told her, "You won't believe what just happened." Turned out that Barbara was being audited. The IRS wanted some documents and had said they would send an agent to her home to collect them. She had said, "If you send an agent to my home, I'll shoot him." Threatening an IRS agent over the phone. That's a felony. And so she was arrested.

I never saw Barbara again. I don't know what happened to her. But I'm telling you, men in black still scare me. I pay my taxes every year. It hurts, but I just have to live with it. Because I don't want men in black coming after me. I learned that when I was 16.
31 weeks ago
31 weeks ago Link To Comment
"Self-imployed" adj. The condition of ones self-employment imploding during the Obamatopia.
31 weeks ago
31 weeks ago Link To Comment
I just don't know what to think of this.

If the couple roughly earns equally - each partner contributes the same - then maybe the small increase (or decrease! - that also exists) can be viewed vis-a-vis the massive advantages the states gives married couples.

At the tender age of mid-50s, I will likely never marry. I want to get some of those government goodies too. I have only paid, paid, paid.

On the other hand, if you have a couple with the big earner and the sit-at-home housewife, I don't know what to make of that situation. If she (I'll randomly use "she" here for the sit-on-her-fat-ass partner) were single, she would lilkely have to work. It's a huge advantage to sit on your dumper and watch Dr. Phil, while having the same lifestyle as a doctor, engineer, lawyer or Indian chief.

And somehow, the big earner (randomly "he") must get some huge pleasure out of supporting the other partner. This huge chivalrous pleasure, which I have never understood, would also not be possible with a single person.

I guess I'll have to think about it some more.
31 weeks ago
31 weeks ago Link To Comment
While correlation does not mean causation I find it interesting that declining birth rates seem to be most severe in countries with the most severe "progressive" tax system.
31 weeks ago
31 weeks ago Link To Comment
I've written software to calculate both federal and state income taxes, and I can attest that Mr. Williams is correct that it is impossible to get rid of the marriage penalty with the tax system that we have. There are dozens of tresholds and maxima that affect taxes, and that usually, with the best of intentions, have different values depending on whether the return filed is for a single person, a married couple filing jointly, or a married person filing separately, and which make eliminating the marriage penalty at least extremely difficult, if not impossible, with the system that we have. Eliminating them would give us a far different tax system - not the one that we have.

In 2001, the Republican-controlled Congress did eliminate the explicit marriage penalty (in terms of explicit tax rates), which was a big step forward, but it was still common for married couples to pay more than they would have had each spouse been able to file as a single person, with half the income and half the deductions of the couple jointly. In any event, the 2001 tax bill was good for only ten years, because it requires sixty votes in the Senate to pass any tax law that extends for more than ten years, and it wasn't possible to get sixty votes for a bill that would extend for more than ten years.
31 weeks ago
31 weeks ago Link To Comment
"... I can attest that Mr. Williams is correct that it is impossible to get rid of the marriage penalty with the tax system that we have."--Formerly Ern

Join me in opposition to the unwed mother bonus--the so-called Head of Household filing status.
31 weeks ago
31 weeks ago Link To Comment
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