Marriage Penalty Tax

Posted:
in General Discussion edited January 2014
I don't think anyone can argue that this extra tax is fair. Why should people pay more tax when they are married than if they had stayed single? If anything my wife and I are cheaper in the system and should pay less. Or single people should pay more to even it out.





But many say this is a theoretical penalty and doesn't effect many people so why bother fixing it. If effected me this year. So I'll hold back on how much extra we had to pay and let people here tell me how much they think is too much for the marriage penalty tax.



Your guesses?
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Comments

  • Reply 1 of 43
    brussellbrussell Posts: 9,812member
    When I was first married, my wife was still in grad school and not making any money. Marriage was a tax cut for us. Then when she started working, there was a penalty for being married.



    There is no "marriage tax." Any tax consequences of marriage are a by-product of a whole bunch of rules that effect people differently depending on their circumstances. Perhaps everyone can agree that we need a simpler tax system where taxes would be neutral with respect to marriage and lots of other things.
  • Reply 2 of 43
    since when are taxes supposed to be fair?

    someone who pays $20,000 in taxes gets the same services from the government that someone who pays $1,000.

    it does seem silly that the government would encourage "living in sin", but i don't think too many people factor that into the equation before they make the big leap.
  • Reply 3 of 43
    mac gurumac guru Posts: 367member
    Quote:

    I don't think anyone can argue that this extra tax is fair. Why should people pay more tax when they are married than if they had stayed single?



    We got a tax cut for our getting married in 2001. Dunno what you're talkin bout...



    Mac Guru
  • Reply 4 of 43
    scottscott Posts: 7,431member
    BRussell situation is the same as mine. I work for a living now. Big hit on the taxes. It comes out of the fact that individually we would be taxed at a lower rate.





    But someone take a guess. How much extra did we pay?
  • Reply 5 of 43
    Quote:

    Originally posted by superkarate monkeydeathcar

    it does seem silly that the government would encourage "living in sin", but i don't think too many people factor that into the equation before they make the big leap.



    Modernism vs. Traditionalism- the conflicts of the 20th century in a nutshell. I'm reading T.S. Eliot's "The Wasteland" right now and it's making sick how he hates everything modern.
  • Reply 6 of 43
    trumptmantrumptman Posts: 16,452member
    Well the marriage penalty might not be that big for some of you because you a) work b) report your income jointly and would likely do so even if you were just "living in sin."



    The place where this hits hardest is for a "couple" where the woman works, usually only part time or not at all. She is supported by her "boyfriend" who is not claimed as part of the household. She likely being low income, not because her household is that low, but because she only reports her income as her "household income."



    As a result of her "low income household" she gets her daycare subsidized (while most families pay between $60-100 a week) and she not only doesn't owe taxes, but gets the Earned Income Tax Credit which pays her even though she hasn't paid in.



    The guy would just pay on his regular income, but if they buy a house, he can declare the interest since he needs deductions and things of that nature.



    The difference between a two parent family with either a stay at home mom, or part time mom that is married and a non-married, working the system family is substancial. It is several thousand dollars in taxes alone. The day care benefits, free lunches and things of that nature are worth even more.



    Nick
  • Reply 7 of 43
    pscatespscates Posts: 5,847member
    All I know is, after two days of putzing around with my taxes (a tad more involved this year because of freelance work spanning two states and a few other little things), I'd just about support ANYTHING other than the current system.



    I believe I'm a fella with average-to-above-average intelligence (anyone disagreeing with that, save it for another thread...), but I swear I could NOT comprehend some of the sentences in the various worksheets and instruction booklets.



    I don't know who could sit and write a sentence like that, let alone come up with a system so convoluted and complex.



    National sales tax, flat tax, a "take-25%-of-my-paycheck-and-leave-me-alone-already" tax, etc. would be better and less frustrating/worrisome than this current ridiculous system.



    And it seems that it gets harder and goofier every year. I hate it with an absolute passion. Even though I'm getting back some nice refunds (it's my money anyway, so "refund" is kinda a weird word to describe it), I'd completely give those - and any future ones up - if I didn't have to go through all this crap every year.



  • Reply 8 of 43
    scottscott Posts: 7,431member
    Okay so no one wants to guess so I'll just tell you all that my tax bill was $1500 more becuase my wife and I are married.



    I could have stimulated the economy with that money
  • Reply 9 of 43
    Quote:

    Originally posted by Scott

    Okay so no one wants to guess so I'll just tell you all that my tax bill was $1500 more becuase my wife and I are married.



    I could have stimulated the economy with that money




    By "economy", do you mean your "wife"
  • Reply 10 of 43
    scottscott Posts: 7,431member
    Quote:

    Originally posted by MrBillData

    By "economy", do you mean your "wife"





    She has plenty of plastic to do that on her own.





    Oh my what did I just say?





    Actually the wife wants to goto Paris this summer so we could have saved the money for that.









    WTF is up with :o not being
  • Reply 11 of 43
    trumptmantrumptman Posts: 16,452member
    Don't worry Scott, I'm sure all the folks who got the earned income tax credit will be happy to go for you.



    Nick
  • Reply 12 of 43
    sdw2001sdw2001 Posts: 16,929member
    The Flat tax is a good idea. I know folks say it would be harder on low income earners, but I still would support it. In the end, it is much more fair.



    We should have a national sales tax for Social Security. This would elminate the 12% that comes out of your check every week. Then, we should have a 5% flat tax. No deductions, no exemptions, nothing. Everybody pays 5-8%. The rich would end up paying at least as much as they do now.



    Now hold on, before you flip out: Though the marginal rates are in the twenties and thirties, we don't actually pay that. I think I paid about 10% this year. We should also have nothing more than a piece of paper to fill out this return. It should be a 15 minute task.



    I agree the marriage penalty sucks. It hits us hard because my wife makes less than I do. Overall though, what really burns me are the rates themselves. When the income tax began, it stood at between one and six percent depending on income. Now we have rates UP TO 36% or so. That's absurd.
  • Reply 13 of 43
    aquafireaquafire Posts: 2,758member
    Maybe the trick would be to have a "flat rate tax" on all goods & services.

    Dump all forms of personal income tax per se & just have a flat tax for the goods you buy & for all services & bills.

    make is just 10% & your then contributing your share to the economy everytime you buy some gas or by a drink.

    I know many european countries including the UK use this sort of tax system. It seems to be fairer & doesn't make you pay more for being married.
  • Reply 14 of 43
    sdw2001sdw2001 Posts: 16,929member
    Quote:

    Originally posted by aquafire

    Maybe the trick would be to have a "flat rate tax" on all goods & services.

    Dump all forms of personal income tax per se & just have a flat tax for the goods you buy & for all services & bills.

    make is just 10% & your then contributing your share to the economy everytime you buy some gas or by a drink.

    I know many european countries including the UK use this sort of tax system. It seems to be fairer & doesn't make you pay more for being married.




    I could live with that. I have thought about that before.
  • Reply 15 of 43
    trick falltrick fall Posts: 1,271member
    I hate the marriage penalty, hate sales tax more. SDW you have .062% deducted from your check for Social Security, your employer then contributes another .062%
  • Reply 16 of 43
    Quote:

    Originally posted by trick fall

    I hate the marriage penalty, hate sales tax more. SDW you have .062% deducted from your check for Social Security, your employer then contributes another .062%



    That "employer contribution" is one of the greatest deceptions the US Congress has ever conceived of (and implemented).



    That's your money. It's accounting trickery which makes you feel better about paying that extra 6% tax (because you don't see it).



    Anybody who is self-employed figures this out pretty quick. When I first started working for myself, I was so angry that I had to pay this extra tax myself (in the self-employment tax). I didn't figure it out until I started paying myself like a real employer would (with withholding). Then I was like, "Oh, I see. My salary is actually higher than what's shown on my paycheck. The extra bit is half the SS and MC tax which is sent directly to the IRS before it even hits my check." It actually made me feel better because, before I realized this, I thought I was paying some sort of "self-employment" penalty. Now I see we're all paying it. Misery loves company.
  • Reply 17 of 43
    trumptmantrumptman Posts: 16,452member
    Quote:

    Originally posted by spotcatbug

    That "employer contribution" is one of the greatest deceptions the US Congress has ever conceived of (and implemented).



    That's your money. It's accounting trickery which makes you feel better about paying that extra 6% tax (because you don't see it).



    Anybody who is self-employed figures this out pretty quick. When I first started working for myself, I was so angry that I had to pay this extra tax myself (in the self-employment tax). I didn't figure it out until I started paying myself like a real employer would (with withholding). Then I was like, "Oh, I see. My salary is actually higher than what's shown on my paycheck. The extra bit is half the SS and MC tax which is sent directly to the IRS before it even hits my check." It actually made me feel better because, before I realized this, I thought I was paying some sort of "self-employment" penalty. Now I see we're all paying it. Misery loves company.




    Oh come on, it isn't like they are taking that Social Security money and spending it now so that they will have to tax you even higher later to repay the money they already took from you....



    Oh wait.....



    Nick
  • Reply 18 of 43
    bungebunge Posts: 7,329member
    Well it's a good thing wars don't cost much otherwise you guys would be complaining about all the damn taxes you have to pay for 'defense' spending.
  • Reply 19 of 43
    sdw2001sdw2001 Posts: 16,929member
    Quote:

    Originally posted by bunge

    Well it's a good thing wars don't cost much otherwise you guys would be complaining about all the damn taxes you have to pay for 'defense' spending.



    No, I'd be complaining about the other things our government spends money on, like the thousands of government programs and agencies that are redundant, inefficient and utterly useless.
  • Reply 20 of 43
    alcimedesalcimedes Posts: 5,486member
    actually, a flat tax could be really easy on poor people. you excempt food and clothing, everything else you pay for normally.
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