UnThreaded | Threaded | Whole Thread (38) | Ignore Thread Prev | Next
Author: aja91 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308722  
Subject: Re: Slight O/T : Tax Cut Date: 6/8/2001 12:24 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
What exactly is the "marriage penalty" or "marriage tax" that folks are talking about?

Income tax brackets and standard deductions for "Married" filers are not double those of "Single" filers. That is (and I'm pulling numbers out of thin air here) you are taxed at 15% on the first $24,000 of income if single and the first $40,000 if married. Standard deduction is $4500 if single, $7500 if married. In a two income family, that means that by filing as married, more income gets taxed at a higher rate than if they filed as singles. Singles in this example get the first $48,000 ($24k each) taxed at 10%, married only gets $40,000, so $8,000 gets taxed at the next rate (I think that's 25% now). I think the calculation I've seen is that if you take the standard deduction it comes out to about a $1300 increase in taxes for these two. If you are a single income family, the impact is less but still there.

I recall reading an article a while back about the marriage penalty. Seems it came into existence about 35 years when single folks complained that married people were getting a huge break from the government, since it cost less to be married (shared cost of housing, vehicles, insurance, et), and complained about the "Single Penalty"... ;-)
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (38) | Ignore Thread Prev | Next

Announcements

TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement