The Marriage Tax is Down But Not Out

Harvey Rosen ()

No 2231, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The public debate surrounding the Tax Reform Act of 1986 has paid little attention to the tax consequences of being married. Specifically, there has been virtually no discussion of the possible existence of an implicit "marriage tax"--the increase in the joint income tax liability of a man and woman when they marry. This lack of concern appears to be due to the perception that the new law has lowered marginal tax rates to such an extent that the magnitudes of marriage taxes (and subsidies) are inconsequential. In this paper, I show that to the contrary, the new law created large taxes on being married for some couples, and large subsidies for others. On the basis of a tax simulation model, I estimate that in 1988, 40 percent of all couples will pay an annual average marriage tax of about $1100, and 53 percent will receive an average subsidy of about $600. One striking result that emerges from the analysis is the relatively large marriage tax that will be borne by some low income couples with children. For such couples, the marriage tax can amount to 10 percent of joint gross income. Hence, the new tax law appears to quite "anti-family" for some low income workers.

Date: 1987-05
Note: PE
References: View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as "The Marriage Tax Is Down But Not Out." from National Tax Journal, Vol. 40 , No. 4, pp. 567-576, December 1987.

Downloads: (external link)
http://www.nber.org/papers/w2231.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:2231

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2231

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().