Is Our Fiscal System Discouraging Marriage? A New Look at the Marriage Tax
We develop, apply, and test a new measure of the marriage tax – the reduction in future spending from getting married – using SCF and ACS data. Our measure incorporates all major and most minor U.S. tax and benefit programs. And it assumes clone marriage – marrying oneself – to ensure the living-standard loss from marrying is unaffected by spousal choice. Our calculated high and highly variable marriage taxes materially reduce the probability of marriage particularly for low-income females with children.
The authors gratefully acknowledge research funding by the Federal Reserve Bank of Atlanta (FRBA), the Goodman Institute, Boston University, and Economic Security Planning, Inc. Kotlikoff is the President and largest shareholder of Economic Security Planning, Inc., but derives no income from the company. The study uses the Fiscal Analyzer, a tool developed by the company under contract with FRBA. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.