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I suspect this is a result of the tax system in the US which is structured in a way that strongly incentivises parents into marriage. Europe generally taxes in
by laurencerowe 3y ago
I suspect this is a result of the tax system in the US which is structured in a way that strongly incentivises parents into marriage.
Europe generally taxes incomes individually and offers parental leave to help when one of the parents is out of the workforce with a baby. In the US there's just the pooling of tax allowances.
For dual income households in very high cost of living areas though you need to balance the benefits of pooling tax allowances while only one of you is working with the reduction in mortgage interest tax deduction (which has the same maximum for both a married couple or unmarried single filers.)
- Racing0461 3y ago> I suspect this is a result of the tax system in the US which is structured in a way that strongly incentivises parents into marriage. the gain from married to Married filing separately is insignificant.
- laurencerowe 3y agoThe gain is from married filing jointly while one partner is not working. At $100k it roughly halves the income tax you pay.
- Detrytus 3y agoOr where one partner earns significantly more, like $150k vs $50k - joint filing still puts you in a lower tax bracket.
- Racing0461 3y agoIf im taking care of a partner, i should be able to deduct expenses up to my total income like corporations can. halving the tax is still not enough to move the needle for people to get married due to better taxes.
- laurencerowe 3y agoThis results in those in higher income tax brackets receiving far more money which is deeply inequitable.
- Racing0461 3y agoHaving single men pay for other men's children, incentivising single motherhood seems inequitable, no? Lions are smarter than us.
- laurencerowe 3y agoUgh. What a horrible thing to say.
- andyjohnson0 3y agoSo in your view they're going from cohabiting to marriage to separated/divorced, rather than cohabiting to separated? In that case it seems more likely to me (non-US person) that cultural factors are pushing people towards marriage, rather than purely financial considerations.
- laurencerowe 3y agoSpecifically on the "unmarried adults who decide to live together do it for a much shorter duration than in Europe." quoted in the parent comment. I think there are cultural reasons why Americans are more likely to get married too, but don't discount the financial incentives since they are pretty substantial for new parents. Remember this is a country with no right to paid maternity leave! Take an example of an unmarried couple in San Francisco earning the median salary for the city of roughly $100,000/year each. As they both earn the same amount and get their health insurance through their respective employers so getting married has no immediate financial impact on them. They then decide to have a baby and one of them wants to take a year off to be with their young baby. They need health insurance but if they are unmarried and go on their partners health plan then that part of the health benefit is not tax deductible for their partner. If they get married they will pay maybe $12,000/year less in tax by filing jointly. ($7k federal tax, $3k state tax, $2k from deductible health benefits though maybe one partner would qualify for medicare.) So I think the financial considerations are a big part of why Americans choose to get married more than Europeans. As someone who moved here as an adult I find it so weird that it's talked about so much! Having children in a stable unmarried partnership is completely unremarkable for my friends and family in Europe.
- andyjohnson0 3y agoThanks. Those numbers are quite pursuasive.