Thanks. Well aware of this mathematical issue since my early days at Treasury thanks to Walt Stromquist. But it's not as difficult as it may appear: some combination of more individual filing (as in Social Security; I would extend to wage subsidies for most people) and an attempt to set a maximum marginal tax rate. for the combination of direct taxes and means-tested phase out for most means-tested programs. At household incomes above median, I'm OK also with some joint phase out as well since many of these households benefit from marriage subsidies. Note that somewhere above median, the marginal tax rate is about 15 percent Social Security and 25 percent income tax, so a maximum rate of total phase out for means-tested programs plus regular tax might be set at or not too much above that 40 percent level. Note also that health exchange subsidies in Obamacare have significantly reduced big marriage penalties in Medicaid in most states, though there are a lot of other issues with how that phase out rate hides total costs of healthcare.
It’s just not possible (mathematically) to achieve all of the following:
(1) no marriage penalty
(2) no single person penalty
(3) progressive income taxation
(4) joint tax returns for married couple
Our system seems pretty committed to 3 and 4 so you have to give on 1 and/or 2. It basically splits the difference and penalizes married couples who eat similar amount while benefiting couple who earn very different amounts (vs if the same couples were single).
Gene - I believe that the War on Poverty passed during Johnson’s term was / is a major destruction of the Black family and significant increase in unwed pregnancies and lack of adult male guidance to teens, resulting in poor outcomes for those teens. I do not know how to “put the genie” back in the bottle, but anything that can lead young people to believe in the “sanctity” of marriage, or a lifelong commitment to be wedded to another, would be a plus for our society. It was a significant positive factor for about 2000 years, but not so much for the last 50 years. Bob Gephart
Thanks. Well aware of this mathematical issue since my early days at Treasury thanks to Walt Stromquist. But it's not as difficult as it may appear: some combination of more individual filing (as in Social Security; I would extend to wage subsidies for most people) and an attempt to set a maximum marginal tax rate. for the combination of direct taxes and means-tested phase out for most means-tested programs. At household incomes above median, I'm OK also with some joint phase out as well since many of these households benefit from marriage subsidies. Note that somewhere above median, the marginal tax rate is about 15 percent Social Security and 25 percent income tax, so a maximum rate of total phase out for means-tested programs plus regular tax might be set at or not too much above that 40 percent level. Note also that health exchange subsidies in Obamacare have significantly reduced big marriage penalties in Medicaid in most states, though there are a lot of other issues with how that phase out rate hides total costs of healthcare.
Thanks for engaging on this.
It’s just not possible (mathematically) to achieve all of the following:
(1) no marriage penalty
(2) no single person penalty
(3) progressive income taxation
(4) joint tax returns for married couple
Our system seems pretty committed to 3 and 4 so you have to give on 1 and/or 2. It basically splits the difference and penalizes married couples who eat similar amount while benefiting couple who earn very different amounts (vs if the same couples were single).
Gene - I believe that the War on Poverty passed during Johnson’s term was / is a major destruction of the Black family and significant increase in unwed pregnancies and lack of adult male guidance to teens, resulting in poor outcomes for those teens. I do not know how to “put the genie” back in the bottle, but anything that can lead young people to believe in the “sanctity” of marriage, or a lifelong commitment to be wedded to another, would be a plus for our society. It was a significant positive factor for about 2000 years, but not so much for the last 50 years. Bob Gephart