socially available option, but that marriage penalties
Existing research primarily relies on hypothetical situations to document EITC marriage penalties
, with little empirical work exploring penalties based on real-life situations.
Instead, the current regime would in fact exacerbate marriage penalties
and marriage bonuses.
especially, might face larger marriage penalties
in 2013 than they had in 2010.
Observers note that some couples might prefer to retain state protections respecting community property (tenancy by the entirety), healthcare provisions and insurance benefits, while circumventing marriage penalties
under federal tax law.
Also marriage penalties
, marriage bonuses, passive investment rules, divorce property settlements and preferential treatment of donations to charitable organizations of securities and cash versus other assets--all are discriminatory, he says.
63-68); greatly reduce marriage penalties
by giving married taxpayers a tax rate schedule with brackets twice as wide as those applicable to single taxpayers and by giving married taxpayers a "family credit" twice as large as a single person's credit (p.
To illustrate marriage penalties
and bonuses more precisely, consider the following hypothetical couples.
Harry Grubert of OTA and Rosanne Altshuler of JCT used data from the Controlled Foreign Corporation study in "The Location of Multinational Corporation Income: New Developments and Implications for Policy." Peter Brady of OTA and Paul Smith of the Federal Reserve used the 1987-forward Individual Income Tax Panel in "Receipt of Capital Income and the Effect of Recent Savings Proposals." Janet Holtzblatt and Emily Lin of OTA compared estimates using individual cross-section and panel data in "Marriage Penalties
and Bonuses: A Longer Term Perspective." Robert Strauss, of Carnegie-Mellon University and Miguel Gouveia of the Catholic University of Portugal used data from the 1040 public-use file to study medical expenses.
They calculate marriage penalties
and reductions in marriage bonuses using alternative approaches and assumptions, with the Treasury Department's micro-simulation model.