(June 25, 2015 at 12:34 pm)das_atheist Wrote:(June 25, 2015 at 9:32 am)Pyrrho Wrote: In the U.S., whether marriage affects taxes, and how much, depends on many other factors. If one makes substantially more money than the other, then marriage gives a tax break. But not if they earn the same. Then it can actually cost extra. Of course, different states have different taxes, and even different counties within states can have different taxes, so the situation is really a good deal more complicated.
So it sounds like the way the marriage taxes are setup encourage one person to work and one person to stay at home.
In a way, yes. But a tax break is not the same as an income, so one may prefer to have both people work.
Basically, with federal U.S. income tax, if you are married, you may file your taxes jointly, and then the total income is considered to be income earned by two people instead of one. You can then get a break on your taxes, if one works and the other does not, because each will effectively be considered as earning half of the total income, and the greater the income, the higher percentage of tax that you pay. So, if you earn $100k per year and your spouse earns nothing, instead of you being taxed at the $100k rate, you will both be taxed at the $50k rate. This is a bit of an oversimplification, but gives the right general idea for most cases. Different kinds of income are taxed differently; if you want a full, complete, detailed look, visit the IRS web site and look at form 1040 and the instructions for it to start, and then you would need to look at other things for some of the minutia about how different sources of income are taxed.
Basically, the different sources of income being taxed differently is a con that the rich have put in place in order to pay less in taxes; Warren Buffett famously pays a lower percentage in taxes than his secretary. To his credit, Buffett does not approve of this. But this is a digression from the issue of marriage and its impact on taxes (which is only one of many things affected by marriage).
"A wise man ... proportions his belief to the evidence."
— David Hume, An Enquiry Concerning Human Understanding, Section X, Part I.
