Re: Marriage Penalty- Child Tax Credit Bill Passes- Where's Max to Analyze?
On Fri, 30 Mar 2001 06:20:44 -0500, Nathan Newman wrote: As a number of conservatives have noted, we are reaching the point where a majority of families will be paying no income taxes at all. This is actually quite positive, since any appeals to cut all taxes "X percent" will have no even propaganda appeal to such families, since X% of zero is still zero. I have to respectfully disagree with Nathan on one point. In my view, there is a distinct danger in the prospect of a majority of American families not paying income taxes. Although I'd be hard pressed to be more specific, I think it's conceivable that those Americans who do not pay income taxes will be increasingly considered as having an insignificant stake in the affairs of the federal government, and the federal government an insignificant stake in them. On the whole, the marriage tax reduction is a good thing. It will encourage a lot of couples to get married and stay married. The result will have a positive effect on social coherence, a quality today in rare quantity, and eventually on public spirit. The other marital reform that many neocons want, however, is the end of no-fault divorce. This would again trap numerous women in abusive relationships. That might help social coherence, but at inestimable cost. Just as there ought be little cost in forming a social association to be anticipated, so ought there be little cost in dissolving associations to be afeard. Andrew Hagen [EMAIL PROTECTED]
Re: marriage penalty
what do pen-l's tax wonks think of the alleged "marriage penalty" of the US tax system? (Forget the GOP plan. It won't go anywhere.) I'd be interested to know the income brackets that are getting nailed. I know that if you're low income and collecting the earned income tax credit getting married is a penalty -- which is the irony since they supposedly want to encourage the heathen poor to shack up legally. kelley
RE: marriage penalty
I wrote this about it two yrs ago. http://www.prospect.org/columns/sawicky/sa980723.html JD: what do pen-l's tax wonks think of the alleged "marriage penalty" of the US tax system? (Forget the GOP plan. It won't go anywhere.) The 'bonus' can be misconstrued. Those whose taxes fall by marrying can reduce them again by getting a divorce and splitting their income. (i.e. alimony is taxed to the recipient, not the donor) You can eliminate the 'penalty' and have any distribution of taxes you like, and any revenue level you like. The simplest way is to just have the standard deduction and brackets for couples be twice those of singles. Then marriage can never put you in a higher bracket. Bob McIntyre did numbers on how to do it while leaving the system progressive and not losing money. Problem is, if you get rid of the penalty, you create a problem re: householders. A single parent w/child could owe more tax than a couple with no children and the same income. If you give the householder the same standard deduction and brackets as the couple, then two householders who marry can get . . . you guessed it, a marriage penalty. The real problem w/the 'penalty' is with EITC recipients. Combining incomes of spouses can push them out of range of any benefits (the limit is $30K). That's what should be fixed, if anything. mbs
RE: Re: marriage penalty
The penalty is not getting married per se, but marrying and setting work arrangements such that joint income exceeds the income of the beneficiary family(s). The phase-out for a family (married or no) with children starts at $12,500 and ends between $26K and $30K. So insofar as your combined income spills over $12,500, you start to lose benefits, and if over $30K, you become ineligible. So to retain all your benefits you need a house-spouse who works (or whateva) at home. mbs I'd be interested to know the income brackets that are getting nailed. I know that if you're low income and collecting the earned income tax credit getting married is a penalty -- which is the irony since they supposedly want to encourage the heathen poor to shack up legally. kelley
