Negating the Cost of ‘I Do’: Ending the U.S. Tax Code's Family Penalty through Permissive Joint Filing

39 Pages Posted: 8 Mar 2017  

Christine Allie

Widener University - Delaware Law School

Date Written: March 7, 2017

Abstract

In June 2016, House Republicans announced their vision for a simplified tax code built for economic growth in a 35 page policy paper released as part of a six part series. The proposal envisions a code that eliminates the personal exemption while increasing the standard deduction for married and unmarried individuals, and preserves the Heads of Households income tax filing status with an attendant standard deduction in an amount midway between the deduction available to an Unmarried Individual and a taxpayer who is Married Filing Jointly.

In November 2016, Republican Donald Trump was elected as the 45th President of the United States which, along with the elections of a Republican controlled House and Senate, increase the chances that such significant changes to our tax structure are more likely to become law. During his campaign, President-elect Trump introduced a simplified tax plan which similarly eliminates personal exemptions, though, additionally, eliminates the Heads of Households filing status that was first added in 1951. Since 1986, we have been amending an already excessively complicated tax code in order to add expenditures to encourage and to punish various behaviors. In contemplating a major Code revision, we will strive for simplicity, support for families, fairness, and progressivity. This paper argues that such fairness and support for families must be expressed through a code that eliminates the family tax penalty created by the current application of the Heads of Households filing status and mandates filing status based on marriage. To support the family, our tax code must end its use of marital status as a measure of economic circumstances where it penalizes the family.

Keywords: Taxation, Tax Law, Families, Married Couples, Family Tax Penalty, Marriage, Deductions, Tax Code

JEL Classification: K34

Suggested Citation

Allie, Christine, Negating the Cost of ‘I Do’: Ending the U.S. Tax Code's Family Penalty through Permissive Joint Filing (March 7, 2017). Widener University Delaware Law School Legal Studies Research Paper Series No. 17-07. Available at SSRN: https://ssrn.com/abstract=2928853

Christine Allie (Contact Author)

Widener University - Delaware Law School ( email )

4601 Concord Pike
Wilmington, DE 19803-0406
United States

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