[coccinelle]

It can be also a married person tax depending on your circumstances. If both spouses make similar amounts then they are getting taxed more as a married couple, because the bracket threshold for a married couple are less than 2x that for an individual. I don't understand why everyone is not taxed as an individual, regardless of marital status.

[knallfrosch]

> I don't understand why everyone is not taxed as an individual, regardless of marital status.

Because married couples form a household and it allows them to share child care and work as they see fit.

If you tax individuals, you're encouraging both to earn the same amount of money.

If you tax couples, it encourages the higher earner to keep working, thus you have a higher overall productivity.

Thus you have freedom and higher overall productivity in favor of shared tax burden.

[hellojesus]

I don't follow. If you encourage both to work, don't you get more total productivity? How does productivity increase by incentivizing one to leave the workforce?

And by encouraging both to work, you'll get more total tax revenue.

[scotty79]

> How does productivity increase by incentivizing one to leave the workforce?

Maybe it's a long term strategy? The tax you'll levy on the kid (as the kid and later as adult) is expected to be much more than what you can levy on one partner (during child rearing)?

[zeroonetwothree]

Taxing as individuals is kind of unfair to single earner households, since the earner has to support more people it seems reasonable to tax them less. You could maybe accomplish a similar thing with deductions but there will still be some weird cases

[graemep]

We have exactly this problem in the UK.

A couple each home earns x, each gets taxed on x. Each gets the tax free allowance on the fist £12.5k of the annual income. Each gets the full basic rate slice before they hit higher bands etc.

If one of the couple earns 2x and the other zero, then only one can use their tax free allowance and they get one slice of the basic rate band etc.

They still have the same pre-tax income for the same household.

Personally I think people should be allowed to opt in to sharing taxable income.

[jamespo]

This discourages people joining the workforce and is open to fraud. You will then get the argument of "why should I be taxed more because I'm single"?

[graemep]

Why do we need to push people into the workforce? There are a lot of social benefits to people being stay at home parents (which will be the commonest reason for doing so).

What fraud?

> You will then get the argument of "why should I be taxed more because I'm single"?

You might, but its a dishonest argument. You are taxing households together. You are giving each individual the same amount of tax free income and the same amount in the lower bands.

It is already possible for self employed people to do this by making their spouses a partner or shareholder in the business or similar. This is just extending the same rights to employed people.

[jamespo]

Why is taxing households together the correct thing, other than the fact it presumably would improve your personal standard of living (it would also improve mine)? What are you trying to encourage? I could see if you want to encourage families having tax benefits based on children - but universal childcare provision seems more likely to succeed.

And as for not seeing how a tax cut based on 2 people living together could not be abused, you must be very short sighted.

[triceratops]

> Why is taxing households together the correct thing

Hypothetically if the household splits up due to a divorce its assets are divided 50:50 (this varies by jurisdiction). Usually (again depending on the jurisdiction) the lower-earning spouse also gets alimony to even up the difference in income resulting from the new situation, at least for a few years.

Clearly then the state believes assets owned and income earned by either one of the couple belong equally to both (something I agree with personally: it's called a partnership). If that's the case, how could it be wrong to tax the household as a single entity?

[graemep]

> Why is taxing households together the correct thing

its fairer

> It presumably would improve your personal standard of living

I am divorced and remain single so it would make no difference to me

> could see if you want to encourage families having tax benefits based on children

I want people to enjoy family life. Its the same reason I want family friendly working hours, decent paternity leave, a right to home educate and better schools etc.

> And as for not seeing how a tax cut based on 2 people living together could not be abused, you must be very short sighted.

And as for not seeing how a tax cut based on 2 people living together could not be abused, you must be very short sighted.

Please do explain . Also please find evidence it is abused where tax does work like that. Its not a cut either as many households would pay the same tax, and its likely rates would go up slightly to make it revenue neutral. Its also more consistent as benefits are based on household income in the UK, as are things like student loans and educational bursaries and the treatment of finances in divorce.

[scotty79]

> What are you trying to encourage?

Specialization within the houshold? Because it's conducive to reproduction?

[toast0]

As a mostly single earner in a community property state, my spouse earns half the income for tax purposes. If you were going to tax individuals, it's probably reasonable to apply income evenly across marriages for all states.

[mikepurvis]

I supported a non-earning spouse for a decade in Canada and it's always been a bit murky. Like in 2014-2015 there was a concept of transferring up to 50k of income to the spouse ("Family Tax Cut"), but Trudeau's Liberal gov't canceled it when they came into power; I think they correctly recognized that it was basically a handout to families privileged enough to be in a position where there was enough spread between the two earners that transferring that sum would be significant.

CRA is even pretty careful about letting a spouse claim capital gains income; it's always attributed back to whoever earned the original principal (outside of inheritance). I think the only way around this is to formally "loan" the spouse their investment money, but you have to charge them interest and the interest is of course income to you.

[stackskipton]

Tax policy is also used a method of encourage certain types of behavior and discourage others. EV Tax Credits and Solar Tax Credits are example of encouraging starting up industries which we need to assist with climate change in economic powered method.

At a broad level, offering benefits for marriage solves political problem, married people tend to vote so need to be catered to. It also solves societal one, marriage tends to be better at extremely broad strokes for society. Married Couples live longer, commit less crime, kids in married households generally have better outcomes and so forth. So politicians in United States decided to incentive it.

[hellojesus]

I would prefer that tax disincentives existed in the form of excise taxes on things the government doesn't want consumed. Instead of offering EV tax credits, why not offer 0% tax on EVs and 200% tax on ice? Let's get rid of this nonsense 16A and go back to the correct form of federal taxation: excise and/or apportioned if you need a non consumption based tax.

[antonymoose]

I just checked the Federal rates and they’re pretty much exactly double from single to married.

Are you in a funky state with bad tax policy?

[LanceH]

The threshold rates for a lot of credits, deductions and exemptions are not. Like the Roth IRA is $153k for single, $242k for married. Child care credits have a similar problem if I remember correctly (or they did before my kids grew out of it).

[hellojesus]

Plus states and counties do it too.

Portland, OR metro gives a $125k threshold to single and only $200k to married filing jointly for supportive housing taxes, which is a 1% tax on income above the threshold.

I have no idea why households that tend to demand less housing (married usually live together) are charged more than singles, who typically demand their own housing at that income level. It makes no sense!

[dh2022]

Because households that share housing have more disposable income than individuals living by themselves.

[hellojesus]

The thought being it's okay to steal from married households because they intentionally set themselves up for lower per partner overhead? Why don't we charge single taxpayers with roommates on the same schedule?

By living in a single house, a married couple demands less housing, which reduces the cost of housing against a fixed supply. Why are we taxing the people making housing cheaper under the guise of "affordable housing"? Shouldn't we treat affordable housing taxes like the carpool lane and reduce the burden of those that are reducing the burden on the constrained supply?

[soupfordummies]

I did a draft of our taxes this week and it was almost exactly the same amount filing married vs separately. Where is the big benefit for filing jointly? I guess if you claim dependents?

[dmoy]

MFS vs MFJ is a whole different thing from MFJ vs 2x Single.

While there's numerous places where MFJ < 2x Single due to various marriage penalties, and even more numerous places where 2x Single < MFJ due to the shared tax bracket space below the 37% bracket....

there are very very few places where MFS > MFJ. They exist, but you have to be in particular situations like one person having disproportionately more debt and on an income based repayment plan, or similar.

There are of course many situations where 2x Single = MFJ = MFS if it's just two similar income W2 employees with no edge cases going on.

(Once you're married, filing 2x Single is obviously not an option)

[antonymoose]

If one spouse makes significant income and the other does not, it can help drop the high-earner into a lower bracket overall. Not a huge boon, but every penny counts in our household.

[wkaisertexas]

A married couple pays the same income tax as two single payers making half the income.

Due to progressive taxation, we tax two people who make $50,000 less than someone who makes $100,000 which is where the tax savings come from.

[pavon]

TIL. All the tax bracket thresholds for married filing jointly are exactly double that of married filing separately, which are the same as single taxpayer, except the threshold for top-most bracket where it switches between 35% and 37%, which is wildly different in favor of single taxpayers. Weird.

[anamax]

A marriage differential is a mathematical consequence of progressive marginal rates and community property (specifically the ability to shift income between spouses).

To put it another way, eliminating the marriage differential[1] in all cases requires giving up progressive marginal rates or community property.

Which one do you want to give up?

[1] The current US brackets and deductions taxes some married couples more than comparable pairs of individuals, taxes some less, and is basically a wash in other cases. It's easy to move couples between the first two groups and you can move some of each to the third, you can't move all of them.

[wkaisertexas]

What is very strange is that some states let you file jointly to save money on federal income taxes, but file separately for state income taxes and others do not.

Taxation is a strange, mixed-up world.

[scotty79]

The calulator doesn't support negative savings. The color is green all the time and even the minus sign is stripped from the large font number.

Try 500k both

[mahirsaid]

if its not more evident that taxes are to benefit whatever it is and not what's important. The complex rules that are based on 0 logic.