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Wednesday, January 9, 2013

MCCLUSKY: 'Fiscal cliff' deal penalizes married couples - Washington Times

MCCLUSKY: 'Fiscal cliff' deal penalizes married couples - Washington Times

When the “marriage penalty” first appeared in the tax code in 1969, most families had only one member working, and the tax provision was designed to give a tax cut to one-income families. Unfortunately, the tax failed to envision the growing number of women in the workforce. Today in most families, both spouses work, either because they want to or because they must to make ends meet. The marriage penalty targets these two-income families for higher taxes. That is because the penalty taxes the income of a family’s second wage earner at a much higher rate than if the salary were taxed only as that of an individual.
In order to address this inequality, the tax cuts of 2001 and 2003 resulted in married couples in the 10 percent and 15 percent tax brackets receiving standard deductions that are exactly twice those of individuals. Prior to 2001, many married couples paid a “penalty” because their standard deductions and income tax brackets were less than twice those of singles.
Unfortunately, the penalty that the tax code gives to married couples never went away for those in higher tax brackets. Congress‘ last-minute actions (after years of inaction) surrounding the “fiscal cliff” on New Year's Day perpetuated bad dogma resulting in the 25 percent bracket ending at $87,850 for singles but only at $146,400 for joint filers. The highest bracket starts at the same income level whether the filer is a married couple or a single person.


Read more: http://p.washingtontimes.com/news/2013/jan/8/fiscal-cliff-deal-penalizes-married-couples/#ixzz2HWypAxul
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