The Negative Effect of the Marriage Penalty Tax on American Society

Academy of Accounting and Financial Studies Journal, Vol. 13, No. 1, pp. 103-125, 2009

26 Pages Posted: 7 Dec 2010 Last revised: 16 Dec 2010

See all articles by Frederick J. Feucht

Frederick J. Feucht

Prairie View A&M University

Murphy Smith

Texas A&M University-Corpus Christi-Department of Accounting

Robert Strawser

Texas A&M University - Department of Accounting

Abstract

This study is an extension of prior research that quantifies the magnitude of the marriage penalty tax (MPT) and measures the distributional effects on the U.S. population in general. We use the Internal Revenue Service’s Statistics of Income (SOI) data and the Census Bureau’s year Current Population Survey (CPS) database. Estimates of the MPT are computed based on the effects of the most recent tax act to all taxpayers according to class of income. The study examines distribution of the MPT and projects effects of current tax law affecting MPT, the Jobs and Growth Tax Relief Reconciliation Act of 2003. Enactment of this tax law was partly motivated by President Bush’s assessment that the tax code frequently taxes couples more after marriage and the MPT contradicts not only basic values but any reasonable sense of fairness. However, even after the passage of the act, results of this study indicate that while the marriage penalty tax is reduced, it continues to negatively impact American society. This, in turn, may have important implications for the social welfare of the nation. To make matters worse, current reductions in MPT will ‘sunset’ or expire after 2010, unless Congress votes to extend provisions of JGTRRA (aka Bush Tax Cuts).

Keywords: MPT, Income Tax, Marriage Penalty Tax, Bush Tax Cuts

JEL Classification: E62, H2, H24, K34, M41

Suggested Citation

Feucht, Frederick J. and Smith, Murphy and Strawser, Robert, The Negative Effect of the Marriage Penalty Tax on American Society. Academy of Accounting and Financial Studies Journal, Vol. 13, No. 1, pp. 103-125, 2009. Available at SSRN: https://ssrn.com/abstract=1721205

Frederick J. Feucht

Prairie View A&M University ( email )

PO Box 188
Prairie View, TX 77446-0188
United States

Murphy Smith (Contact Author)

Texas A&M University-Corpus Christi-Department of Accounting ( email )

6300 Ocean Dr
Corpus Christi, TX 78412
United States

Robert Strawser

Texas A&M University - Department of Accounting ( email )

430 Wehner
College Station, TX 77843-4353
United States

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