The government’s approach to taxation reveals some outdated assumptions that might make it seem sexist. Let me explain with a couple of examples based on what I’ve observed and heard from friends.
Firstly, tax brackets don’t double when people get married, which seems unfair. For instance, if Johnny and Susie each make $500,000 annually, as singles, they fall in the 35% tax bracket and pay a reasonable rate. However, when they marry, their combined income doesn’t alter their tax brackets accordingly, costing them about $20,000 more in taxes annually. A straightforward fix would be to double the tax threshold for married couples to maintain fairness.
Secondly, let’s talk about mortgage deductions. If both individuals have significant mortgages before marriage, they enjoy substantial tax deductions as singles. However, once married, they’re restricted to the same deduction limit as a single homeowner, effectively halving their tax benefit if their combined mortgages exceed the $1 million cap. It would make sense to adjust this cap to $2 million for married couples to prevent this penalty.
These issues highlight a broader problem: the tax code seems to penalize dual-income married couples, almost discouraging both partners from working or getting married if they are high earners. This can feel particularly discriminatory towards women, especially since the tax laws seem to assume only one spouse (historically the man) will be the primary earner.
So, why aren’t more people upset about this? It might be because not many reach the income levels where these issues become a significant problem. However, just because it doesn’t affect the majority doesn’t mean it’s fair.
With changing societal norms where dual-income families are common, it’s crucial to reconsider how our tax system supports or penalizes modern family structures. We should question whether these policies reflect outdated stereotypes rather than today’s realities. What’s your experience with tax liability after marriage? Have you ever thought twice about getting married because of potential tax hikes?
