A Practical Solution to the Marriage Penalty

Abstract

In the federal income tax code, there is a marriage penalty resulting from tax brackets that do not double upon marriage. This marriage penalty persists despite universal condemnation of it, penalizing a significant portion of married women who work and many same-sex couples. This Article proposes a novel way to deal with this marriage penalty by creating a filing status for dual-income couples that earn an amount within a particular percentage of each other. This filing status would be the same as the current married filing status, except it would double the rates of single filers by accommodating two incomes. This approach represents a break from the status quo of only separating single taxpayers from married ones, which fails to consider that in reality there are two types of married couples: one- and two-income. This proposed solution differs from previous ones that require married couples to file as single individuals and that ignore marital status. Adding another filing status for two-income married couples is a practical solution to the marriage penalty that causes the least upheaval to the general legal framework because it continues to treat spouses as a single economic unit.