From Theory to Praxis: Marriage and Taxes through a GSS lens

As I prepare to pursue a Masters in Accountancy, it may be difficult to see how topics we discussed in GSS101 will connect to my future career. One of those topics was marriage and the reasons for and against same-sex marriage. Advocates often cited tax benefits as a “pro” for the passage of same-sex marriage, so I wanted to explore what tax benefits couples can receive when married versus not, and how the tax code may subtly discriminate against certain groups.

Married taxpayers can file either of two ways: either individually by the head-of -household or jointly, but only if the marriage is recognized. Before the 2015 Supreme Court Decision in Obergefell v. Hodges that legalized same-sex marriage, couples could not file their taxes jointly, and therefore may have been disadvantaged in the amount of taxes they paid. To determine how much someone pays to the government, every individual is placed in a bracket by the amount he or she earns. The tax code places married couples in brackets by the amount the couple earns together. In progressive tax structures, which many states and the federal government currently use, those in the higher income brackets are taxed at a higher rate. For joint filers, the 10 and 15% brackets, where most people tend to fall, are twice as wide, and the higher tax brackets are less than twice as wide, so a joint-filing couple might be more likely to fall into this lower tax bracket than two individual filers would.

Not all same-sex couples may benefit from joint filings. Married couples usually receive either a penalty or a bonus on their taxes. Penalties occur when a couple has to pay more taxes than it would if it filed individually, and bonuses occur when couples save money by filing jointly. When spouses earn similar and relatively high-incomes, they are more likely to receive a penalty. These penalties tend to occur because as joint filers, these couples are less likely to be able to take deductions for children, but if they separated into single and head-of-household, they would be able to receive deductions for dependents.

On the other hand, joint filers can also receive marriage bonuses, which most often occur when one spouse earns all the familial income. A joint filing would likely shift this couple into a lower tax bracket because the lower brackets are twice as wide and, therefore, incorporate even some high earners. In reality, those who make less money, like many LGBTQ individuals who felt same-sex marriage argument was only a battle for upper-class, white gays and lesbians, could benefit from a decrease in taxes if married. These people, however, were largely arguing against this very idea. They realized that the institution of marriage is all about protecting wealth, not love, and if LGBTQ couples want to “redefine love,” they should not feel the need to buy into the heteronormative institution of marriage. In examining this tax structure, I would argue that, beyond LGBTQ individuals, heterosexual women should also be more aware of the patriarchal assumptions that the tax code for joint-filers makes. While a heterosexual couple can still earn a marriage bonus if the woman earns most of the income, it is clear that those who have set up the code over the years have assumed that women would not earn an income, or at least not one that would be competitive enough to negate a bonus.

As we have learned, using a GSS lens can give a new perspective to the assumptions and subtle discrimination that exists in every part of our society. Even in progressive tax structures, ones that liberals fight to protect, discrimination, unfortunately, still exists, and if we intend to ameliorate this pervasive issue, we must at first recognize it. It will be beneficial to take this interpretation into my future career, as I may help people choose a filing, not necessarily just based on money, but also understanding their stance in their relationships.

Sources Referenced:

http://taxfoundation.org/blog/how-many-taxpayers-fall-each-income-tax-bracket

http://www.bankrate.com/finance/taxes/3-tax-traps-same-sex-couples-can-avoid-2.aspx

http://www.taxpolicycenter.org/briefing-book/what-are-marriage-penalties-and-bonuses