The Magazine

Marriage Penalties

What's good and what's bad in Bush's tax plan.

Feb 26, 2001, Vol. 6, No. 23 • By ALLAN CARLSON and DAVID BLANKENHORN
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WHEN MARRIAGE BUFFS (like us) consider President Bush's proposed tax cuts, we don't obsess over whether they will be good for the economy, or for certain government programs, or for the Republican party. We lose sleep over whether they will be good for the institutions of marriage and the family. And for those who share our little fixation, here's the skinny: President Bush's tax plan contains one very good idea and one very bad one.

The good idea is doubling the child tax credit, from $500 to $1,000. This increase would reflect the principle that raising children is not only a private lifestyle choice, like raising geraniums, but also a socially necessary vocation that deserves and requires support from society.

Unlike reducing marginal rates, which disproportionately benefits the affluent, the child tax credit is non-regressive; the poorest taxpaying family benefits from it just as much as (and proportionately more than) the richest. Moreover, unlike the notoriously unfair dependent care tax credit, which provides tax relief to parents using commercial child care, the child tax credit helps all taxpaying families with children. (Indeed, as part of this year's tax package, we hope that the president and Congress will finally correct the inequity at the heart of the dependent care tax credit, either by replacing it with an even larger child tax credit -- say, $1,500 per child -- or by making it available on a non-discriminatory basis to all families with young children.)

At the same time, while the child tax credit helps many married parents, its connection to marriage itself is indirect. Because the credit is marriage-neutral, it fails to reflect any societal or policy understanding of what marriage is. To get at this deeper issue -- the one that truly sets the heart of the marriage buff aflutter -- we must look at what is surely the most misbegotten tax issue of the past two decades: the so-called marriage penalty. And here is where the Bush tax plan takes a wrong turn. Indeed, the president's proposal to reduce the marriage penalty would weaken marriage, not strengthen it.

To get this issue straight, we need to rewind the tape a bit. For marriage buffs, the tax question on which all else rides is whether we tax married persons as individuals, essentially as if they were single, or treat the married-couple household as a single unit of taxation. Because marriage buffs want public policy to recognize that marriage exists, we cling to the latter formula. Conversely, those who dislike marriage, as well as those who haven't thought it through, or who simply have other tax-policy fish to fry, almost always favor the tax-them-as-individuals approach.

Criticism of something called the "marriage penalty" -- defined as a married couple's paying more in taxes filing jointly than they would if they had remained single and filed separately -- first emerged in the United States in the 1970s. The proposed solution sprang from the ideological Left, and entered the U.S. debate in part by way of Swedish social radicalism: Ignore marriage altogether. Tax everyone individually. Such a shift in public policy would eliminate the marriage penalty, but it would also sharply scale back recognition of marriage in public policy and, in the process, create substantial economic disincentives for all forms of marital interdependence, including the decision of mothers to be at home with children. For the Left as a whole, this posed no problem. And for the anti-marriage Left, what a sweet irony. They could advance their agenda under the rhetorical guise of helping some married couples!

In the early 1980s, the story got even stranger, as eliminating the Left-defined "marriage penalty" suddenly became a pet cause of supply-side economists in the Reagan administration. Supply-siders' mission is to cut marginal tax rates to induce more and more Americans to get jobs and work longer hours, thus boosting the gross national product. In important respects, however, they are soul mates of the anti-marriage Left. Both groups see the world primarily in terms of autonomous individuals, not family units or people who depend on others. Both strongly favor the market economy over the household economy, and paid work over unpaid work. In particular, both groups look at able-bodied mothers at home with children and see a social problem.