Race, Taxes, and Marriage

In practice, the tax system does violate the latter condition, in part because of beliefs about the incentive effects of marriage penalties and the social benefits of marriage. [...] In regression analysis, we find that the difference in the prevalence of marriage penalties between Black couples and white couples is driven by racial differences in the level of income, the prevalence of two-earner families, and the presence of dependents. [...] In the SCF data we use, couples represented 24 percent of Black tax units and 38 percent of Black adults (persons over the age of 18) but 52 percent of white tax units and 68 percent of white adults. [...] The 2001 tax cut reduced marriage penalties by changing the two lowest income tax brackets, the standard deduction, and the phaseout rules for the earned income tax credit (EITC). [...] The differential marriage tax that is imposed on Black couples relative to white couples can be related to issues of structural racism—as both the result and the cause of a system of reinforcing disparities.