Marriage Can Bring Bliss and Sometimes a Penalty Too

Of the many inequities in the U.S. tax code, probably none is more visible or less defensible than what has come to be known as the marriage penalty. Through a quirk in how the progressive tax system is structured, the marriage penalty forces millions of couples who file joint returns to pay more than if each filed singly. A single taxpayer earning, say, just under $24,000 has a 15% rate. But a married couple, each of whom earn $24,000, find themselves with a 28% rate and, possibly, up to several thousand dollars more in taxes to pay than if they were unmarried and filing separately. Last year 42% of all joint filers were caught in that trap.

No, it doesn’t make sense, and congressional Republicans say they want to remove the unfairness. That’s a splendid idea and well worth supporting--provided that doing away with the marriage penalty is accompanied by other changes to make up for the projected loss to the Treasury.

One possible impediment to finding a responsible way to erase the marriage penalty is that the majority of married filers actually do quite well by it. As Times staff writer Janet Hook reported this week, 51% of couples, generally those with very unequal incomes, actually enjoy a marriage bonus in filing jointly. Last year, according to the Congressional Budget Office, that bonus averaged a tidy $1,300. Political realism makes clear that changing the rules for joint filers who pay more because of marriage must not add to the tax burden of those joint filers who benefit from the current rules.

So what can feasibly be done? The simplest course might be to reduce if not eliminate the marriage penalty by allowing joint filers to take a modest exemption on the income of the lower-earning spouse.

Another proposal is to allow married couples the option of filing separately at a rate like that of singles. Either idea would of course reduce revenues, in the case of the separate-filing option by an estimated $18 billion a year. Who pays to offset that loss?

Persuasive answers are, alas, scarce. House Speaker Newt Gingrich suggests that projected budget surpluses could take care of the problem. But it will be four or five years, if then, before any significant surplus appears; to base tax policy on the hope of future tax revenues is to bet foolishly on a roll of the dice. The marriage penalty is demonstrably unfair and should go. But it’s unfair as well to campaign for its elimination without explaining how lost revenues will be made up. So far no credible plan has been offered.