NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Recent Developments in the Marriage Tax

Daniel R. Feenberg, Harvey S. Rosen

NBER Working Paper No. 4705 (Also Reprint No. r1958)
Issued in April 1995
NBER Program(s):   PE

The new tax law increases tax rates of high income individuals, and expands the earned income tax credit for low income individuals. We use a sample of actual tax returns to compute estimates of the 'marriage tax' - the change in couples joint tax upon marriage - under this new law. We predict that in 1994 52 percent of American couples will pay a marriage tax, with an average of about $1,244; 38 percent will receive a subsidy averaging about $1,399. These aggregate figures mask a considerable amount of dispersion in the population. Under the new law, the marriage tax for certain low-income families can exceed $3,000 annually; for certain very high income families it can exceed $10,000 annually.

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Published: National Tax Journal, vol. XLVIII, no. 1, pp. 91-191, (March 1995).

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