Should Tax Code Reflect Marriage (and Divorce) Realities?

November 02, 2006 | Blog, Tax Issues

Icon for author Brian Vertz Brian Vertz

From the TaxProf Blog:

Shari Motro (Richmond) has published A New “I Do”: Towards a Marriage-Neutral Income Tax, 91 Iowa L. Rev. 1509 (2006).

Here is the abstract:

The federal income tax system treats married couples as if each spouse earned approximately one-half of the couple’s combined income through a mechanism called “income splitting.” For many one-earner and unequal-earner couples, income splitting produces a significant advantage, a “marriage bonus,” by shifting income from higher to lower rate brackets. Marriage-based income splitting relies on a presumption that marriage is a good indicator of economic unity between two taxpayers. It is not. Marriage does not require spousal sharing and many unmarried couples share everything they earn. As a result, the current system extends the benefit of income splitting to some taxpayers who do not deserve it while withholding it from others who do. Because marriage is a poor proxy for economic unity, this Article proposes a new eligibility criterion for income-splitting: only couples legally committed to sharing their income, regardless of marital status, would be permitted to file jointly.

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