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Whither the Marriage Tax?

Author

Listed:
  • James Alm

    (Department of Economics, Tulane University)

  • J. Sebastian Leguizamon

    (Department of Economics, Vanderbilt University)

Abstract
We use household data from the Current Population Survey to calculate how the real value of the so-called "marriage tax" or "marriage subsidy" in the federal individual income tax has changed over the period 1969 to 2009. We examine three issues: the magnitude of the marriage tax/subsidy and its evolution over time, its effects on the distribution of income (including the effects of different demographic characteristics on the magnitudes and trends), and the causal factors in its evolution (e.g., tax changes, demographic changes). We find that the tax treatment of the family has changed significantly over time, from a large average marriage bonus in 1969, to a large marriage tax in much of the 1990s and early 2000s, to a large marriage subsidy since 2003. We also find that the marriage tax varies significantly and systematically by income level, as well as by the number of children in the family, the earnings ratios of the spouses, the race of the family, and the age of the household held. Finally, we find that changes in income and family composition have influenced the magnitudes and trends of marriage taxes and subsidies but that adjustments in the federal income tax code account for most of the observed changes.

Suggested Citation

  • James Alm & J. Sebastian Leguizamon, 2015. "Whither the Marriage Tax?," Working Papers 1511, Tulane University, Department of Economics.
    • Handle: RePEc:tul:wpaper:1511
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    File URL: http://repec.tulane.edu/RePEc/pdf/tul1511.pdf
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    References listed on IDEAS

    as
    1. Eissa, Nada & Hoynes, Hilary Williamson, 2000. "Explaining the Fall and Rise in the Tax Cost of Marriage: The Effect of Tax Laws and Demographic Trends, 1984-97," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(3), pages 683-712, September.
    2. Eissa, Nada & Hoynes, Hilary Williamson, 2000. "Explaining the Fall and Rise in the Tax Cost of Marriage: The Effect of Tax Laws and Demographic Trends, 1984-97," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 683-712, September.
    3. Alm, James & Whittington, Leslie A., 1996. "The Rise and Fall and Rise ... of the Marriage Tax," National Tax Journal, National Tax Association, vol. 49(4), pages 571-89, December.
    4. Alexandre Laurin & Jonathan Rhys Kesselman, 2011. "Income Splitting for Two-Parent Families: Who Gains, Who Doesn't, and at What Cost?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 335, October.
    5. Kaplow, Louis, 1989. "Horizontal Equity: Measures in Search of a Principle," National Tax Journal, National Tax Association;National Tax Journal, vol. 42(2), pages 139-154, June.
    6. Feenberg, Daniel R. & Rosen, Harvey S., 1995. "Recent Developments in the Marriage Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(1), pages 91-101, March.
    7. Lin, Emily Y. & Tong, Patricia K., 2012. "Marriage and Taxes: What Can We Learn From Tax Returns Filed by Cohabiting Couples?," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(4), pages 807-826, December.
    8. Alm, James & Whittington, Leslie A., 1996. "The Rise and Fall and Rise ... Of the Marriage Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(4), pages 571-589, December.
    9. Kaplow, Louis, 1989. "Horizontal Equity: Measures in Search of a Principle," National Tax Journal, National Tax Association, vol. 42(2), pages 139-54, June.
    10. James Alm & Stacy Dickert-Conlin & Leslie A. Whittington, 1999. "Policy Watch: The Marriage Penalty," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 193-204, Summer.
    11. Bakija, Jon & Steuerle, C. Eugene, 1991. "Individual Income Taxation Since 1948," National Tax Journal, National Tax Association;National Tax Journal, vol. 44(4), pages 451-475, December.
    12. Clarke, G.R.G. & Strauss, R.P., 1996. "Effects of the Federal Individual Income Tax on Marriage and Divorce Decisions," RCER Working Papers 436, University of Rochester - Center for Economic Research (RCER).
    13. Bakija, Jon & Steuerle, C. Eugene, 1991. "Individual Income Taxation Since 1948," National Tax Journal, National Tax Association, vol. 44(4), pages 451-75, December.
    14. James Alm & Leslie A. Whittington, 1999. "For Love or Money? The Impact of Income Taxes on Marriage," Economica, London School of Economics and Political Science, vol. 66(263), pages 297-316, August.
    15. Nancy R. Burstein, 2007. "Economic influences on marriage and divorce," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(2), pages 387-429.
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    Citations

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    Cited by:

    1. Manuel Schechtl, 2020. "Taxation of Families and “Families of Taxation”? Inequality Modification Between Family Types Across Welfare States," LIS Working papers 800, LIS Cross-National Data Center in Luxembourg.
    2. James Alm, 2017. "Is Economics Useful for Public Policy?," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 835-854, April.
    3. James Alm, 2017. "Is Economics Useful for Public Policy?," Southern Economic Journal, John Wiley & Sons, vol. 83(4), pages 835-854, April.

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    More about this item

    Keywords

    marriage; individual income tax; marriage tax; taxable unit;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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