Marriage Penalty

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      As a couple is walking down the aisle after they have just been married, the only thing that is probably on their mind is the love that they have for each other.   But afterwards, whether simply hours or up to many months later, almost half of those couples will discover something they may not like. They will owe “Uncle Sam” anywhere from a few dollars to more than a thousand dollars more in taxes.   The Congressional Budget Office estimates that 43 percent of all married couples pay an average of $1,480 more in taxes each year than single people that earn the same income (Hederman, 2000).   This tax penalty is completely unfair to these hard-working Americans that fall into the certain range of the tax code.   While this may not prevent couples from marrying, some may delay until the next tax year to avoid the impending income loss. This marriage “penalty” tax came about through changes in the tax code over the years.   In 1913, when the tax code was first implemented, United States citizens had to file taxes separately, whether married or not.   This caused an unfair advantage to couples in community-property states, since they could claim exactly half of the total household income instead of the exact portion that each spouse earned.   Therefore, if a husband made all the income for the household, then in these states each spouse could file taxes on half the total income.   This, in turn, would lower each person’s taxable income and lower their overall taxes, so they would get more money back, which is called a marriage “bonus”.   In 1948, the government changed the tax code, allowing all married couples to use “income-splitting”.   Stein, a senior economist to the Joint Economic Committee (1997) states that with income-splitting, couples, in this time, would owe 42% less than they would if they were single.   Finally, in 1969, the government responded to the concerns of single people, by making changes.   Tax rates and marginal brackets were shifted for...