Wild Cobra
12-07-2012, 05:14 AM
Government needs to get out of the marriage business. Have only individual tax returns. Not recognize marriage for anything outside of common assets should one die, and accept contractual agreements between consenting adults that treat them as married if desired.
Now I decided to bring this up primarily to bring up the "marriage penalty" in tax law. For numerous reasons, it is more advantages to not be married. Health care benefits are now being allowed for unmarried couples, making marriage even more irrelevant.
The entitlement system prefer single parents with children over married couples. The whole government system is geared to help unmarried people.
Now I brought into discussion in another thread the "marriage penalty." Nobody yet seems to understand what I speak of. Well, here it is. Before, when people ignorantly thought congress got rid of the marriage penalty, they didn't. Consider this. A couple with two children. Each parent makes $40k annual. To keep it simple, I will stick to only the standard deduction and exemptions. Earned income credits and other credits and deductions will skew things as well, but I just wish to keep it simple to illustrate a point, only showing Earned Income Credit. I will base this on the 2011 tax table, which most people will have access to.
A family of four, two income earners, $40k each, for $80k annual. They get a standard deduction of $11,600 and four exemptions of $14,800. Taxable income is $53,600 for a tax liability of $7,164.
Now if they file married/separate, and claim 1 and 3 exemptions, or 2 and 2, they pay more. $7,198 or $10,798. This isn't what I'm talking about, and under some instances, filing separate is probably an advantage.
Now...
If they divorce, or were never married to begin with. The woman normally files Head of Household with three exemptions, and the man normally files single with one exemption. The woman would get a standard deduction of $8,500 and $11,100 in exemptions, for a taxable income of $29,400 and a tax liability of $2,456. She gets an earned income credit of $198. The man gets a standard deduction of $5,800, and exemption of $3,700, taxable income of $30,500 for a tax liability of $4,154. Together, their liability is $6,412. This is $752 less for the couples tax liability. It can get better. If they each become the head of household for one child, their liability is $3,011 each, or $6,022 together. $1,142 less than filing married/joint.
Why is the government promoting that people with children not be married?
Now I decided to bring this up primarily to bring up the "marriage penalty" in tax law. For numerous reasons, it is more advantages to not be married. Health care benefits are now being allowed for unmarried couples, making marriage even more irrelevant.
The entitlement system prefer single parents with children over married couples. The whole government system is geared to help unmarried people.
Now I brought into discussion in another thread the "marriage penalty." Nobody yet seems to understand what I speak of. Well, here it is. Before, when people ignorantly thought congress got rid of the marriage penalty, they didn't. Consider this. A couple with two children. Each parent makes $40k annual. To keep it simple, I will stick to only the standard deduction and exemptions. Earned income credits and other credits and deductions will skew things as well, but I just wish to keep it simple to illustrate a point, only showing Earned Income Credit. I will base this on the 2011 tax table, which most people will have access to.
A family of four, two income earners, $40k each, for $80k annual. They get a standard deduction of $11,600 and four exemptions of $14,800. Taxable income is $53,600 for a tax liability of $7,164.
Now if they file married/separate, and claim 1 and 3 exemptions, or 2 and 2, they pay more. $7,198 or $10,798. This isn't what I'm talking about, and under some instances, filing separate is probably an advantage.
Now...
If they divorce, or were never married to begin with. The woman normally files Head of Household with three exemptions, and the man normally files single with one exemption. The woman would get a standard deduction of $8,500 and $11,100 in exemptions, for a taxable income of $29,400 and a tax liability of $2,456. She gets an earned income credit of $198. The man gets a standard deduction of $5,800, and exemption of $3,700, taxable income of $30,500 for a tax liability of $4,154. Together, their liability is $6,412. This is $752 less for the couples tax liability. It can get better. If they each become the head of household for one child, their liability is $3,011 each, or $6,022 together. $1,142 less than filing married/joint.
Why is the government promoting that people with children not be married?