The Negative Effect of the Marriage Penalty Tax on American Society

Article (PDF Available)inAcademy of Accounting and Financial Studies Journal 13(1) · December 2010with 110 Reads
This study is an extension of prior research that quantifies the magnitude of the marriage penalty tax (MPT) and measures the distributional effects on the U.S. population in general. We use the Internal Revenue Service’s Statistics of Income (SOI) data and the Census Bureau’s year Current Population Survey (CPS) database. Estimates of the MPT are computed based on the effects of the most recent tax act to all taxpayers according to class of income. The study examines distribution of the MPT and projects effects of current tax law affecting MPT, the Jobs and Growth Tax Relief Reconciliation Act of 2003. Enactment of this tax law was partly motivated by President Bush’s assessment that the tax code frequently taxes couples more after marriage and the MPT contradicts not only basic values but any reasonable sense of fairness. However, even after the passage of the act, results of this study indicate that while the marriage penalty tax is reduced, it continues to negatively impact American society. This, in turn, may have important implications for the social welfare of the nation. To make matters worse, current reductions in MPT will ‘sunset’ or expire after 2010, unless Congress votes to extend provisions of JGTRRA (aka Bush Tax Cuts).
Academy of Accounting and Financial Studies Journal, Volume 13, Number 1, 2009
Frederick J. Feucht, Prairie View A&M University
L. Murphy Smith, Texas A&M University
Robert H. Strawser, Texas A&M University
Researcher, scholar, and marriage penalty tax expert, the late Leslie A. Whittington, Professor of
Public Policy at Georgetown University in Washington D.C., was killed on 9-11, 2001 when American
Airlines Flight 77 crashed into the Pentagon with 59 people aboard. Professor Whittington, her
husband, Charles Falkenberg, and their two daughters, 8-year old Zoe and 3-year old Dana were
traveling to Los Angeles and then on to Australia where Whittington had been named a visiting fellow
at Australian National University in Canberra.
This study is an extension of prior research that quantifies the magnitude of the marriage
penalty tax (MPT) and measures the distributional effects on the U.S. population in general. We use
the Internal Revenue Service’s Statistics of Income (SOI) data and the Census Bureau’s year
Current Population Survey (CPS) database. Estimates of the MPT are computed based on the effects
of the most recent tax act to all taxpayers according to class of income. The study examines
distribution of the MPT and projects effects of current tax law affecting MPT, the Jobs and Growth
Tax Relief Reconciliation Act of 2003 (JGTRRA). Results of this study indicate that after passage
of JGTRRA the marriage penalty tax was reduced, but it continues to negatively impact many
married persons in American society. To make matters worse, reductions in MPT will ‘sunset’ or
expire after 2010, unless Congress votes to extend provisions of JGTRRA. The marriage penalty tax
has important negative implications for the social welfare of the nation. Numerous studies on family
structure, controlling for variables such as race, education and income level, indicate that children
raised in married two-parent families have better outcomes on average than children raised in other
settings. The MPT is anti-marriage and anti- family; as a result, the MPT is detrimental to children
and society. Families are the foundation for civilization; when families fail, civilization breaks
down. Given its negative social consequences, the MPT should be eliminated.
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Academy of Accounting and Financial Studies Journal, Volume 13, Number 1, 2009
infer that the MPT via Congress is harming marriage and the best interests of society, both children
and adults. The future of American civilization will largely depend on the vitality of marriage and
the family. The MPT is detrimental to both. Families are the foundation of civilization; when
families fail, civilization collapses. In the final analysis, the MPT is anti-family and thereby anti-
Perhaps this study will stimulate further interest in determining the impact of changes in tax
policy on behavior and the public and social costs associated with MPT. Our work may be extended
by utilizing various assumptions for re-allocation of tax variables including income, expense, and
dependents. Division of these items may affect the impact of changes in tax law. Calculations
involving the separation of the taxpayers from married to single/head of household may involve
assigning the dependents to the highest wage earner, or to the wife, or splitting them equally among
separating ex-spouses. Similarly, income and expense items could be re-allocated among separated
Ultimately, if Congress wishes to maintain revenue neutrality, alternate sources of revenue
must be considered. Researchers might investigate other potential sources of tax revenue to replace
that lost by the minimization or elimination of MPT.
The authors wish to thank the reviewers, discussant, and participants at the American Accounting Association Annual
Meeting and research workshop participants at Texas A&M University.
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