Dr. Martin Hash Podcast

“Marriage penalty” is the colloquial term given to the addition in taxes that married people have to pay compared to if they had stayed single. Over the decades, the marriage penalty has come and gone depending on which voting block was most powerful; single people or married people. Though the Trump tax changes have reduced it, there is still a marriage penalty on Federal Income taxes for low income earning couples. The most ironic part of the marriage penalty is that it becomes a bonus when there is only one high-earner; it's only a penalty when both parents work, as much as 12% of their income. It's even worse for low-earners who may lose their Earned Income Tax Credit when they get married and their spouse's additional low income pushes them out of eligibility.

Taxes confuse most people, especially the difference between State and Federal taxes. Because some States, such as Washington, don't have Income taxes, and some states, like Oregon, make sure there is no marriage penalty, many people mistakenly believe there isn't one, but for federal taxes, the marriage penalty is real indeed. The excuse for the marriage penalty is inexcusable: “because it would take a significant change to the U.S. Tax code;” as if it's never happened before, or that all the other big changes to save The Rich money aren't significant enough? There is also the bizarre filing option of “Married Filing Separately” where married couples are penalized even more. What? They can make the penalty worse but they can't make it better? It should be indisputable that married people should only receive benefits from their commitment to one another, never a penalty. How do the ultra-rich get special Capital Gains tax rates but poor working couples get shafted?