Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10.2 9/18/84 exptools; site ihuxk.UUCP
Path: utzoo!watmath!clyde!burl!ulysses!mhuxr!ihnp4!ihuxk!rs55611
From: rs55611@ihuxk.UUCP (Robert E. Schleicher)
Newsgroups: net.taxes,net.singles,net.flame
Subject: Re: Marriage penalty
Message-ID: <894@ihuxk.UUCP>
Date: Wed, 6-Mar-85 14:03:14 EST
Article-I.D.: ihuxk.894
Posted: Wed Mar  6 14:03:14 1985
Date-Received: Thu, 7-Mar-85 05:33:49 EST
References: <285@calmasd.UUCP> <2297@mit-hermes.ARPA> <897@vax1.fluke.UUCP> <1062@ihuxw.UUCP> <793@loral.UUCP>
Organization: AT&T Bell Laboratories
Lines: 56
Xref: watmath net.taxes:764 net.singles:6121 net.flame:8699

> One point that no one mentions is that a two-earner family puts twice as
> much effort (more or less) into earning that combined annual salary than a
> one-earner family.  My SO and I work a total of > 80 hours/week for the
> priviledge of paying more federal taxes and twice as much social security
> tax as a one-earner family.  (By "work", I mean income producing activities.  
> Please, no flames about househusbands/wives and work. I cook, clean house,
> and raise the minature human too.)
> 
> And because we must both work to survive in today's economy (no more free
> rides for spouses except if you're rich) we must pay for childcare
> ($100/week) which is an added expense that a one-earner family normally
> does not have.
> 
> (I'm not bitchin' about today's economy here.  Only about the marriage
> penalty.)
> 
> {"I should have listened to my mother.  She told me not to get married.",
>  "I should have listened to my mother.  She told me to marry money."}
> 
> Spike
> {ucbvax,decvax,ihnp4}!sdcsvax!sdcc6!calmasd!stj

*** REPLACE THIS LINE WITH YOUR MESSAGE ***
There have been a lot of misconceptions about the "marriage penalty"
on the net lately.    A working couple do pay more social security
than a single earner couple, assuming that the caps on social security
are exceeded.  However, the income tax paid by a two-earner couple
with X total income is the same as the tax paid by a single-earner couple with
X total income (actually a little less due to the working couple deduction,
the ability to have higher IRA contributions, etc.)

Furthermore, a married couple (1 or two earners) with X income pays appreciably
LESS tax than a single person with X income.  (Check the tax tables.)  This
in effect recognizes the added expense of the traditional arrangement of
having one earner in a couple.

The only marriage penalty is that a couple in which each person earns about
X/2 dollars (for a total income of X) pays higher taxes than are paid by 
two single people with an income of X/2 each.  This is an almost unavoidable
by-product of a progressive tax structure, in which doubling your income
results in a more than doubling of your tax bill.

Thus, except for a compromise solution like we now have, there are only two
ways to eliminate the marriage penalty:

1.  Eliminate the progressivity in our tax rates (probably not too likely)
2.  RAISE the taxes for married couple with one earner to be the same as
    that on a single person with the same income (ie, use the same tables).
    Then, every earner just pays the taxces on their earnings, regardless
     of marital status.  This eliminates the penalty by making everyone
     pay the same penalty (in effect).

Each of these has some fundamental problems.

Bob Schleicher
ihuxk!rs55611