How the Tax Code Penalizes Egalitarian Marriages

Since it was introduced in 1948, joint filing has become the default tax status option for most American married couples, making the United States an outlier among peer countries. Defenders of joint filing claim it’s the best way to accurately account for married couples’ pooled resources—or, for pronatalists, to preserve so-called family values and encourage higher birthrates.

But these justifications don’t hold up to scrutiny. “The marriage penalties and bonuses generated by a joint filing regime have little impact on marriage rates but create significant inequities, rewarding sole-breadwinner households and punishing more egalitarian marriages, and often unequally burdening Black taxpayers,” Groundwork Collaborative Senior Fellow Kitty Richards and Roosevelt Research Associate Noa Rosinplotz write in a new brief.

The joint filing regime is a product of its 1940s origin, primarily—and intentionally—benefiting high-earning husbands with low-earning wives. By detailing the effects of contemporary joint filing on couples with equal versus unequal income splits, Richards and Rosinplotz demonstrate that the unequal-income couples stand to gain the most from the system to this day.

This outdated design compounds other pervasive systems of inequality in the modern era: Because women are more likely to be considered the “second earner” in heterosexual marriages, joint filing disproportionately penalizes women’s labor force participation, taxing each extra hour of married women’s labor higher than if they were single. Joint filing also incentivizes a traditional intra-household division of labor wherein one spouse (often the husband) pursues a high-paying job that is time- or labor-intensive and the other (often the wife) picks up the slack domestically, including performing unpaid household labor and childcare. Ultimately, this scenario leaves the low-earning spouse with less economic security, less household decision-making power, and a higher barrier to entry to the workforce.

“Ending joint filing would be a major step toward thinking bigger and building a simpler, more equal, and more progressive tax code that helps women thrive,” Richards and Rosinplotz say.

Read the brief: “It’s Time to End Joint Tax Filing” 

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What We're Reading

• On the budget: Roosevelt Chief Economist Joseph Stiglitz and Senior Fellow Paul Krugman signed an open letter expressing grave concerns about the House budget bill. 
  • “The combination of cuts to key safety net programs like Medicaid and SNAP and tax cuts disproportionately benefiting higher-income households means that the House budget constitutes an extremely large upward redistribution of income,” they write. “Given how much this bill adds to the US debt, it is shocking that it still imposes absolute losses on the bottom 40% of US households.”
  • Related read: Roosevelt Fellow Miranda Yaver wrote about how the budget bill would disproportionately harm Medicaid beneficiaries in rural, Republican-leaning communities. 
• On the cost-of-living crisis: Roosevelt Senior Vice President Suzanne Kahn spoke with Marketplace about parents’ struggles with the lack of affordable childcare and paid family and sick leave.
  • “Families are having to make really hard choices about whether and how much caregivers participate in the paid workforce and how much they are at home,” said Kahn. “And that's not good for the economy.”