Month: February 2025

“Here’s how the joint filing trap works: Under our tax system, higher incomes face higher marginal rates, meaning a couple’s combined income can push them into a higher tax bracket than if they filed separately. A married woman’s earnings, assuming she earns less than her husband, is taxed at the higher rate determined by her husband’s income. Joint filing essentially “stacks” her earnings on top of his for tax purposes.
To give a more concrete, albeit simplified, example: let’s say a woman, Kate, who earns $100,000, marries Jack, who earns $200,000, and they decide to file jointly. Together, their combined income of $300,000 would fall into the 24 percent tax bracket for joint filers. If Kate had filed individually, she would have been taxed in the 22 percent tax bracket, while Jack’s $200,000 would push him into the 32 percent bracket. Put simply, Kate’s earnings are taxed more when she jointly files with Jack.

Though married couples in the US have the option of filing separately, fewer than 7 percent actually do, as that almost always subjects their household to higher taxes than joint filing, in addition to causing them to lose other benefits.

These tax dynamics shape women’s behavior. Early in their careers, married young women often decide it makes more sense to quit working or go part-time, so their family can save on child care and pay less in tax.

Recent economic research has concluded that eliminating joint filing in the US would significantly increase married women’s workforce participation throughout their whole life.”

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“America stands increasingly alone in maintaining this system. In the decades after World War II, most countries copied America’s joint filing approach, but by the 1970s and 1980s — both to advance gender equality and to boost overall employment — nearly all OECD countries reverted back to individual tax filing systems.

The empirical evidence from these reforms is remarkable: Sweden, which abandoned its joint filing system in 1971, saw significant increases in married women’s employment, as did Canada, which shifted to individual taxation in 1988. In a telling contrast, when the Czech Republic bucked the international trend and introduced joint taxation in 2005, the number of married women in the workforce went down.”

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“The US system is particularly entrenched because health care and retirement systems have evolved for decades around joint family benefits. Married couples who file jointly, for example, typically qualify for lower health insurance premiums and more comprehensive coverage than those who file separately. Similarly, filing jointly gives married couples greater access to their spouse’s Social Security benefits.

Past decisions around work and family — including career gaps that erode skills and networks — have also created sticky “lock-in” effects that would be difficult for millions of couples to reverse, even if Congress abandoned joint filing tomorrow.

Still, more targeted reforms might work. During the Reagan administration, Congress briefly implemented a tax deduction for secondary earners, essentially reducing the tax penalty on wives by allowing couples to deduct 10 percent of the lower-earning spouse’s income, up to $3,000. Some economists have proposed bringing this idea back.

Michael Graetz, a tax professor emeritus at Columbia and Yale law schools, advocates both reinstating the secondary earner deduction and expanding child care subsidies. These changes would help protect secondary earners at a crucial career juncture, when child-rearing responsibilities often force women to reduce their working hours for financial reasons.

Tax policy might not be the first thing on the agenda for most feminist activists, but the case for rethinking joint filing is strong. As De Nardi’s research demonstrates, joint filing still poses a major barrier to women’s participation in the workforce, even for younger and more educated women.

“Over time, political inertia and the complexity of reforming entrenched tax systems have likely contributed to its persistence,” she said. “Policymakers and the public may also underestimate the long-term costs.””

https://www.vox.com/policy/390779/tax-wedding-marriage-joint-filing-women