Racial Disparities in the Income Tax Treatment of Marriage

Janet Holtzblatt, Swati Joshi, Nora R. Cahill and William Gale

No 31805, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Although it is generally blind with respect to race, the federal individual income tax can create racial disparities when factors that affect tax liability are associated with race. We provide new evidence on racial differences in marriage penalties and bonuses in the income tax, using data from eight waves of the Survey of Consumer Finances. Our results support Brown’s (2021) hypothesis that, controlling for income, penalties are more frequent and larger for Black couples than white couples. We link these results to racial differences in relative spousal earnings, the presence of dependents, and the level of income. We show that marriage rates are much higher among white adults than Black adults, which implies that two policy reforms we examine end up benefiting a greater share of white adults than Black adults.

JEL-codes: H20 H24 J15 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-lab, nep-pbe, nep-pub and nep-ure
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Published as Racial Disparities in the Income Tax Treatment of Marriage , Janet Holtzblatt, Swati Joshi, Nora Cahill, William Gale. in Tax Policy and the Economy, Volume 38 , Moffitt. 2024

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