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marriage tax penalties

Special K

Diamond Member
Jun 18, 2000
7,110
0
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By "marriage tax penalty", I mean the following:

Look at the current 2012 tax brackets:

http://www.forbes.com/sites/moneybuilder/2011/09/30/2012-federal-income-tax-brackets-irs-tax-rates/

For the 10 and 15% tax brackets, the limit for married filing jointly is exactly twice that of the single rate. For the 25%, 28%, 33%, and 35% brackets the limits for married filing jointly are 1.7x, 1.2x, 1x, and 1x the limits for the single rate, respectively.

Additionally, the standard deduction for a married couple is currently double that of the single rate. According to this link, it used to be only 1.7x the single amount (prior to the 2001/2003 Bush tax cuts):

http://www.smartmoney.com/taxes/income/how-the-expiring-bush-tax-cuts-affect-you/

The above link also outlines several other ways in which married couples could be penalized vs. singles with respect to taxes.

Why was the tax policy setup like this in the first place? I did some searching and came across this link:

http://www.ncpa.org/pub/ba445

It claims that prior to 1948, married couples filed separate tax returns. In 1948, Congress passed a law that originally set the married filing jointly tax bracket limits at 2x the limits for singles. This was later amended in 1969 to make the married filiing jointly limits and standard deductions 1.6x the limits for singles.

In effect, they were apparently trying to strike a balance between couples who saw a tax benefit by getting married and singles who saw a tax penalty by not being married. The article above outlines two hypothetical situations that illustrate this point.

The Bush tax cuts of 2001 and 2003 partially relaxed these limits, as the smartmoney link above explains.

Here are my discussion questions:

1. Do you believe the marriage tax penalty is really about balancing the interests of singles who are penalized by not being married with the couples who do benefit from being married?

2. Do you believe the system is fair overall, or would it be more equal if the married limits were simply set to 2x the limits of single filers?

3. For those of you who are married, did the tax implications of being legally married factor into your decision to get legally married? Do you think the way the system is setup now either encourages or discourages marriage?

I am single so I would be curious to know what the married ATPN members think about this.
 
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nehalem256

Lifer
Apr 13, 2012
15,670
6
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2. Do you believe the system is fair overall, or would it be more equal if the married limits were simply set to 2x the limits of single filers?
Well if women only make 77 cents on the dollar shouldnt it be 1.77x :D

And you also have to take into account that the standard deduction/exemption does double. While standard expenses do not.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,599
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2x is operating on the premise that both partners are earning equality.

What is more fair is for the married couple be adjusted based on income ratio.

If I make 90 and wife makes 10 is it fair to have to meet a standard that is higher that a set of single filers with an income of 80/20.
 

soundforbjt

Lifer
Feb 15, 2002
15,991
3,602
136
There should be no advantage for either group. You want to be married and raise a family, it's your choice, you should plan & pay for it. You shouldn't get "help" from the government.

Shouldn't that be the conservative opinion?
 

dank69

Lifer
Oct 6, 2009
26,148
6,187
136
There should be no advantage for either group. You want to be married and raise a family, it's your choice, you should plan & pay for it. You shouldn't get "help" from the government.

Shouldn't that be the conservative opinion?
That isn't a very good policy for growing the GDP.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
Married couples with children should have even lower tax rates and they should get the child deduction till the parents die. Children are always needing help and money.
 
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piasabird

Lifer
Feb 6, 2002
17,183
60
91
On the other hand if married people do not get any tax help when they have children that might be fine just dont give any help to all the welfare moms and stop paying earned income credit. That be fair for everyone.
 

nehalem256

Lifer
Apr 13, 2012
15,670
6
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On the other hand if married people do not get any tax help when they have children that might be fine just dont give any help to all the welfare moms and stop paying earned income credit. That be fair for everyone.
And eliminate the "head of household" filing status that exist pretty much for single moms.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
What about the tax break for single parent families??? The government does not force anyone to have children.
 

spidey07

No Lifer
Aug 4, 2000
65,481
4
76
Most if not all of obama's tax policies contain the marriage penalty. Remember it was Bush who eliminated the marriage penalty.
 

nehalem256

Lifer
Apr 13, 2012
15,670
6
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Most if not all of obama's tax policies contain the marriage penalty. Remember it was Bush who eliminated the marriage penalty.
Ironically there is not really a marriage penalty for traditional couples where only the man works.

Damn feminist Bush :D
 

PokerGuy

Lifer
Jul 2, 2005
13,652
199
101
Penalizing someone for getting married is just plain wrong. Having children and properly raising them takes enormous amounts of time and resources, and is absolutely critical to the survival and success of the family. Even though I don't have any, I'd say people raising kids should get some breaks. People not raising kids should be treated the same under the tax code regardless of marriage status..... filing jointly should not impact your taxes due.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
I think the tax brackets all need to be changed. If we are going to say $250k is rich then the highest tax bracket for the middle class should end at $249,999.99 Maybe we need a few more brackets for over $1 mil & over $5 mil. Why do millionairs get the same rate as the middle class? This whole tax rate thing is all wrong why not just say that if you earn $1-20k you dont pay taxes???
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,599
5
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What about the tax break for single parent families??? The government does not force anyone to have children.
HoH applies to anyone that has a dependant that does not have a large amount of income.

One could support a GF
One can support kids (own or adopted)
One can support any relative.


HoH was intended to level the playing field when their is only one potential for income within a family.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,599
5
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I think the tax brackets all need to be changed. If we are going to say $250k is rich then the highest tax bracket for the middle class should end at $249,999.99 Maybe we need a few more brackets for over $1 mil & over $5 mil. Why do millionairs get the same rate as the middle class? This whole tax rate thing is all wrong why not just say that if you earn $1-20k you dont pay taxes???
those at the bolded range do not have to end up paying Federal taxes and in many cases get taxes from someone within another bracket.
 
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nehalem256

Lifer
Apr 13, 2012
15,670
6
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HoH applies to anyone that has a dependant that does not have a large amount of income.

One could support a GF
One can support kids (own or adopted)
One can support any relative.


HoH was intended to level the playing field when their is only one potential for income within a family.
They have to be a relative.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
I know that in most cases that people that make $1-$20k usually do not end up paying taxes. Between the personal exemption, head of household, Earned income Credit, and addittional dependents most likely they will not pay taxes, assuming they actually worked all year. I have seen some people's tax returns and typically if a woman works all year at a part time job and makes say $12,000 with 2 kids, they will get a check back as a refund for around $8,000. So all of this is a waste of time. Just say no taxes for people who fail to make $20,000. So starting the second tax bracket at $17,000 which may be considered below the poverty level is also a joke. How about the first tax level be from $20,000 - $39,999.99? This might exclude most people that work at Wall-Mart from even having to file taxes. MY personal thoughts is that earned income credit is stupid. Just go get a second part time job. I think it is a bit much to give someone working part time. The government is not your momma.
 

nehalem256

Lifer
Apr 13, 2012
15,670
6
0
I know that in most cases that people that make $1-$20k usually do not end up paying taxes. Between the personal exemption, head of household, Earned income Credit, and addittional dependents most likely they will not pay taxes, assuming they actually worked all year. I have seen some people's tax returns and typically if a woman works all year at a part time job and makes say $12,000 with 2 kids, they will get a check back as a refund for around $8,000. So all of this is a waste of time. Just say no taxes for people who fail to make $20,000. So starting the second tax bracket at $17,000 which may be considered below the poverty level is also a joke. How about the first tax level be from $20,000 - $39,999.99? This might exclude most people that work at Wall-Mart from even having to file taxes. MY personal thoughts is that earned income credit is stupid. Just go get a second part time job. I think it is a bit much to give someone working part time. The government is not your momma.
This all seems completely sensible.
 

piasabird

Lifer
Feb 6, 2002
17,183
60
91
I am not heartless or anything, but the government does not go around making women preagnant, so why should the Government pay child support? By the government, I mean me. I dont really pay much taxes either. A lot of the exemptions I use are 2 specific deduction areas.
1-Charitable Donations (Tithing, Church welfare, Work charity drives)
2-Home Owner's Deductions (Loan Int, Ins, etc)

I also use family and friends to do work around my House.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,599
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