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Married couples have different tax treatments because of community property rules, and because the unit of taxation is the household, rather than the earner. It
by cheald 11y ago
Married couples have different tax treatments because of community property rules, and because the unit of taxation is the household, rather than the earner. It would be rather regressive to tax a two-person household each earning $25k/yr at the same rate as a single individual making $50k/yr, despite the fact that household income is the same. The intent of the different treatment of married-filing-jointly returns is to attempt to balance the tax paid by married couples so that it's roughly in line with the taxes that would be paid by individuals filing separately. This may result in tax benefits or penalties depending on the earnings status of each of the spouses, but it's hardly an across-the-board. "Tax divorces" are a thing; high-income couples may find it financially advantageous to divorce (even if they continue to live together as a de facto married couple).
As far as kids being an "advantage in their financial livelihoods"...well, yeah, that's just hilarious. Kids are expensive. Tax breaks for kids are a progressive measure intended to make it slightly easier to afford to provide for one if you're in the lower echelons of the economy. If you think that anyone is having kids because of the financial advantages they convey, you're high.
Regarding the article, the "financial benefit" isn't from being married, it's from not being a dependent of your parents. There's no married person favoritism at play here; it's simple dependent eligibility status. You can achieve the same thing by being 24 years old, or by being legally emancipated.
- learnstats2 11y ago> It would be rather regressive to tax a two-person household each earning $25k/yr at the same rate as a single individual making $50k/yr, despite the fact that household income is the same. Two individual people earning $25k should pay a lower rate of tax than one individual earning $50k, yes. But a marriage-based tax break is not the right way to implement this. Tax them individually, just like everyone else, with a progressive tax. The married couple already have significant financial advantages over the single person: the financial security that comes from having two incomes (or even from having one person managing the household, if that's what you're imagining) is huge.
- eitally 11y agoBut historically, two income households have not been common. This is a recent (past two generations) turn of events. I agree that a marriage-based tax break may not have been sensible, although now with gay marriage legal nationwide, as long as the government also recognizes civil unions, it may be ok and solve the part of the problem you note.
- plorkyeran 11y agoDual-income families have been the norm for 40 years now, out of the 100 years that the modern income tax has even existed.
- developer1 11y agoTwo people making $25k/yr should be individually paying the taxes on their own $25k. There should be no ability to transfer tax burden between partners. An adult makes $25k, that adult pays the taxes due on $25k. It's not a difficult concept, and puts everyone in the same position, partner or not.