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The Marriage Tax is Down But Not Out

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  • Harvey S. Rosen

Abstract

The public debate surrounding the Tax Reform Act of 1986 has paid little attention to the tax consequences of being married. Specifically, there has been virtually no discussion of the possible existence of an implicit "marriage tax"--the increase in the joint income tax liability of a man and woman when they marry. This lack of concern appears to be due to the perception that the new law has lowered marginal tax rates to such an extent that the magnitudes of marriage taxes (and subsidies) are inconsequential. In this paper, I show that to the contrary, the new law created large taxes on being married for some couples, and large subsidies for others. On the basis of a tax simulation model, I estimate that in 1988, 40 percent of all couples will pay an annual average marriage tax of about $1100, and 53 percent will receive an average subsidy of about $600. One striking result that emerges from the analysis is the relatively large marriage tax that will be borne by some low income couples with children. For such couples, the marriage tax can amount to 10 percent of joint gross income. Hence, the new tax law appears to quite "anti-family" for some low income workers.

Suggested Citation

  • Harvey S. Rosen, 1987. "The Marriage Tax is Down But Not Out," NBER Working Papers 2231, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2231
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    Cited by:

    1. Immervoll, Herwig & Kleven, Henrik Jacobsen & Kreiner, Claus Thustrup & Verdelin, Nicolaj, 2008. "An evaluation of the tax-transfer treatment of married couples in European countries," EUROMOD Working Papers EM7/08, EUROMOD at the Institute for Social and Economic Research.
    2. Alm, James & Whittington, Leslie A., 1996. "The Rise and Fall and Rise ... Of the Marriage Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(4), pages 571-589, December.
    3. Andrew A. Samwick, 1996. "Tax Shelters and Passive Losses after the Tax Reform Act of 1986," NBER Chapters,in: Empirical Foundations of Household Taxation, pages 193-233 National Bureau of Economic Research, Inc.
    4. repec:kap:reveho:v:15:y:2017:i:4:d:10.1007_s11150-015-9317-6 is not listed on IDEAS
    5. Matthias Wrede, 2000. "Income Splitting – is it Good for Both Partners in the Marriage?," CESifo Working Paper Series 391, CESifo Group Munich.
    6. James Alm & Stacy Dickert-Conlin & Leslie A. Whittington, 1999. "Policy Watch: The Marriage Penalty," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 193-204, Summer.
    7. Martin Feldstein & Daniel R. Feenberg, 1996. "The Taxation of Two-Earner Families," NBER Chapters,in: Empirical Foundations of Household Taxation, pages 39-75 National Bureau of Economic Research, Inc.
    8. Damien Échevin, 2003. "L'individualisation de l'impôt sur le revenu : équitable ou pas ?," Economie & Prévision, La Documentation Française, vol. 0(4), pages 149-165.
    9. Jorge Onrubia Fern·ndez & MarÌa del Carmen Rodado Ruiz, 2015. "oGravamen individual o grupal en el IRPF? Una valoraciÛn desde la movilidad distributiva," Studies on the Spanish Economy eee2015-01, FEDEA.
    10. Janet Holtzblatt & Robert Rebelein, 2000. "Measuring the Effect of the EITC on Marriage Penalties and Bonuses," JCPR Working Papers 127, Northwestern University/University of Chicago Joint Center for Poverty Research.
    11. Dickert-Conlin, Stacy & Houser, Scott, 1998. "Taxes and Transfers: A New Look at the Marriage Penalty," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(2), pages 175-217, June.
    12. Cataldo, Anthony J. II, 1996. "Recent Developments in the Marriage Tax: A Comment and Decomposition," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(4), pages 609-616, December.

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