Isaac, John-Paul and I have been discussing the twin dooms of marriage and taxes on Isaac's comments thread. My last reply got long, as in googleplex o's long. So I post it here, along with a recap of the discussion. Thrill! As the merits of tax law are discussed by amateurs!
The marriage penalty: fair or unfair? Currently, married couples that file jointly have their incomes combined and taxed at the corresponding bracket. If I make $20,000 a year, and my wife makes $60,000, my $20,000 a year paycheck is taxed at the $80,000 level (they also pool their deductions, I'll talk about that more below). The taxation doesn't seem fair, since a non-married couple wouldn't face the same problem. There's a bill in Congress working to change this "marriage penalty." Isaac said:
Marriage as religious/social institution is distinct from marriage as a legal institution. They require two separate processes in order to be considered valid. That they are accomplished mostly on the same day is a matter of convenience, not necessity. That's a point lost on many social conservatives.
Say you have a Catholic man and woman living in the U.S. that wish to marry. In order for the Catholic Church to recognize their marriage, a priest must perform the ceremony, in a church, with certain sacraments. That's a religious/social marriage.
In order for the state and federal governments to recognize their marriage, the couple must pay a fee and sign a license. That's a legal marriage.
Say the couple wants to get married in the park. If they paid their fee and signed their license, the government will recognize their marriage. The Catholic Church won't. Parishioners will believe that God doesn't recognize the marriage. The couple won't enjoy the approval and advantages that the Church and its members provide married couples. The Catholic Church has specific interests, and this fictional couple has violated those interests.
Now say this same couple is same-sex. Their Church is not Catholic, but the MCC. Their church will marry them, and they will enjoy the advantages that their church and social circle will provide. However, the government will have none of it, because...it has violated the government's interests?
The government's only concern is the economic and physical well-being of the country and its citizens. It should never be concerned with religious or cultural engineering. If a religion or a social group disapproves a domestic arrangement, but the arrangement has no bearing on the economic or physical health of the populace, the government shouldn't get involved. Likewise, cultural or religious preference for a type of domestic arrangement shouldn't be reflected in law, or in tax structure. Most people in the United States believe in God, and that God is the foundation of a good marriage and a good society. Should a belief in God, or lack thereof, be reflected in tax structure? Absolutely not. Many people believe that classic rock is great and rap music is banal or offensive. Should that be reflected in tax structure? Hell no.
So, because marriage enjoys a "societal advantage" in most parts of American culture (meaning that people view married couples as more Godly or more stable), doesn't mean that this condition should be reflected in matters pertaining to legal marriage, positively or negatively. To do so would be to punish or reward people who subscribe to a particular belief system.
This leaves us with the issue of "legal advantage."
The question is: is it an economic and physical benefit to the government for people to be married? I think the answer is yes, and, more importantly, so does Uncle Sam. Politicians may spout about morality, but when it comes down to it, it's all about the dollar.
Those "legal advantages" for married people exist because it's in Uncle Sam's interest for the citizenry to marry. Marriage (among straights) often leads to children, who increase the tax base and contribute to the GDP. Married people tend to be more interested in things like property rights, which serves the government through still more taxes. There's even evidence that marriage is good for your health. A healthy citizenry is a healthy tax base. If the government likes married couples, and wants people to get married, then they have to pony up some benefits to encourage this. Those "legal advantages" are a form of incentive.
If that is the case, why should married couples pay greater taxes for what the government is trying to encourage?
This leads me back to the separately/jointly issue: I admit I don't understand tax law, so what follows could be me talking out my tailpipe. I think that if you file separately, your incomes and deductions are calculated separately, on separate returns. If you file jointly, incomes and deductions are grouped. Quoting John-Paul:
Many married people don't have deductions, or, if they do, don't employ tax accountants to exploit them. They file one 1040EZ, jointly.
It seems that if your income is pooled for the sake of figuring your tax rate, and you have no deductions, there is a "marriage penalty." If you take deductions, and your incomes aren't pooled for the sake of figuring your tax rate, then there is actually a "marriage bonus."
Neither of these situations seem fair.
As usual, I don't know what the answer to this dilemma. One possibility is to educate people about taxes, but that's tough. For one thing, no one cares, because taxes are a boring pain. Another solution is a flat income tax, with no higher-percentage tiers based on income. Also a tough sell. It seems that in tax law, someone's always going to get screwed harder than someone else, and it all depends on who Uncle Sam feels has the prettier mouth.