Economic Snapshot | Budget, Taxes, and Public Investment

Marriage penalty taxes

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for September 13, 2000

Marriage penalty taxes
The “marriage tax penalty” is the change in the combined tax liabilities of two single persons when they marry. The chart below shows marriage penalties for families with incomes between $20,000 and $60,000 under different scenarios, including the penalty under current law; under the bill vetoed by President Clinton last summer; under George Bush’s tax proposal; and under Vice President Al Gore’s tax plan.

For the lowest income level shown, plans put forward by Gore and the Congress reduce the penalty, while Governor Bush’s plan makes no change. For incomes of $30,000, Bush, Gore, and the Congress reduce the penalty. At the $40,000 income level, the Congressional plan and Gore reduce the penalty, but the Bush plan reduces it more. For incomes of $50,000, reductions by Gore and the Congress are comparable, while Bush’s plan makes no change. For incomes of $60,000, the GOP bill and Gore’s plan again provide similar reductions, and Bush provides a smaller one. Overall, the Gore plan goes further than any of the others toward reducing the so-called marriage penalty tax.

Marriage penalties

Figure note: A majority of U.S. families have incomes beneath $60,000. These calculations assume that families take advantage of no other provisions of either Gore or Bush’s plans. The results reflect proposed changes in child credits, marginal tax rates, tax brackets, and the Earned Income Tax Credit. These calculations assume the family has two children, and that each spouse earned half of the family’s total income prior to marriage.

This week’s Snapshot by EPI Economist Max B. Sawicky.

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