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Wrong time to divorce ourselves from so-called marriage penalty
Today, roughly 21 million married taxpayers will be subjected to an unpleasant fact of life - an average tax bill that is
$1,400 higher just because they live in wedded bliss.
Republicans, along with some Democrats, want to end this "marriage penalty" with a big tax cut. It's needed, they argue,
in the name of fairness.
But this posturing on behalf of less than a quarter of those filing taxes overlooks a few inconvenient facts - facts that
reveal the latest campaign for what it is, namely a costly effort to shower tax favors on a select group of people. A
rundown:
 The wealthy gain most. Lawmakers pushing this tax cut love to trot out working-class families burdened by this extra
tax. But the bulk of those suffering the marriage penalty are dual-income families earning $50,000 or more. And as a
result, almost 90% of the tax cut goes to the well-off.
That's because of the way the marriage penalty works. The second income is stacked on top of the first and often gets
taxed at higher rates than if the spouses each could file as singles. Few couples with incomes in the minimum 15%
bracket pay a marriage penalty.
More couples get marriage bonuses. Also ignored is the fact that 25 million married couples - mainly those with one
income-earner - actually get a marriage bonus, paying an average $1,300 less than if they hadn't tied the knot. Half of
the tax cut would go to these families, and the cut would create even more bonus winners.
Single filers lose. The leading proposal cuts the marriage penalty by boosting the standard deduction and tax
brackets for married filers. But that would, in effect, penalize single taxpayers since their taxes would be higher relative to
couples getting a fat marriage bonus.
Singles are sure to notice this, just as they did the last time Congress set out to help married couples with big tax breaks.
In 1969, Congress bowed to complaints from single taxpayers, cutting the so-called single's penalty only to create
today's marriage penalty.
It's extremely expensive. At about $144 billion over five years, cutting the marriage penalty is a very costly
proposition.
Backers say they can pay for it with current surpluses, leaving open the question of what programs they would cut when
those surpluses evaporate.
It won't work as advertised. Even with all its costs and complications, the plan on the table won't come anywhere
near eliminating the marriage penalty, in part because about 60 tax provisions penalize some married couples relative to
single filers.
The same lawmakers now bemoaning the marriage penalty added to the pile two years ago, with child and education tax
credits, along with new breaks on retirement savings, which phase out as income climbs.
If lawmakers truly cared about fairness for married couples, they would have to gut these breaks as well.
They won't, of course. Nor should they.
Expensive tax-cut candy for politically favored groups, even if wrapped in a shiny fairness package, is a bad bargain for
everyone.
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