Why Not A Marriage Tax?

If President Obama’s recent speech in Osawatomie, Kansas, is any indication (of course, what this president says is frequently incongruent with what he says later or what he does), his re-election campaign will highlight his bold and courageous opposition to … inequality.

Or perhaps his fierce anti-inequality stance is simply a pre-election gambit to rally his base, since Democrats seem to be the only identifiable group that views income inequality as a serious problem. In a recent New Republic article William Galston concisely reviews recent Gallup poll data that consistently show “Democrats are the outliers” in their views of inequality.

Let me start with a Gallup survey released on December 15, which showed that the number of Americans who see American society as divided into haves and have-nots has decreased significantly since the 2008 election….

Significantly, most of the reduction in those seeing the country as economically divided has occurred in the middle of the political spectrum. In 2008, 48 percent of independents saw an economic divide; today it’s 37 percent. In 2008, 51 percent of moderates saw a divide, versus only 38 percent now. Liberals are the only group that has become more likely to see a divided society—63 percent in 2008, 66 percent today.

Similarly, he writes, a December 16 Gallup poll asked respondents to rank three economic objectives — growing and expanding the economy, increasing economic opportunity, and reducing the income and wealth gap — as either extremely/very important or somewhat/not important. The result?

Regardless of partisanship, substantial majorities of Americans saw expanding the economy and increasing equality of opportunity as extremely or very important. Not so for reducing income and wealth gaps—21 percent of Republicans and 43 percent of independents. Only Democrats gave this goal a high priority, by a margin of 72 to 27.

When Gallup asked a sample of Americans in 1998 whether the gap between the rich and the poor was a problem that needed to be fixed, 52 percent said yes, while 45 percent regarded it as an acceptable part of the economic system. Today, those numbers are reversed: Only 45 percent see the gap as in need of fixing, while 52 percent don’t. Again, Democrats are the outliers: 62 percent of them want it fixed, versus 24 percent of Republicans and 47 percent of independents.

Thus Democrats, with President Obama either leading or following them, place a very high value on reducing economic inequality, spreading the wealth, taking from those with more and giving it to those with less. The “ultimate Occupy Wall Street slogan,” pointed to by Ann Althouse in a New York Times article: “You have more; we want more.”

This desire to take from those who have and give to those who don’t usually finds expression in President Obama’s single-minded desire to tax the rich, you know, those “millionaires and billionaires” making over $200,000 or $250,000. Obama has even acknowledged, for example, that he would consider raising the capital gains tax even if doing so produced no additional revenue:

During a 2008 debate, ABC News anchor Charlie Gibson asked the candidate if he would raise the capital gains tax on the wealthy, even if this policy resulted in lower revenue for the government. Obama answered: “I would look at raising the capital gains tax for purposes of fairness.”

But the presidential mantra of taxing the rich has become tiresome, especially in the face of growing recognition that doing so wouldn’t do much to reduce the deficit. The Wall Street Journal, for example, quotes the following calculations from a reader:

He says a 45% rate on incomes of more than $1 million would generate $31 billion, while an even more progressive tax, with rates of 50%, 60%, 70% on incomes of $500,000, $5 million, $10 million respectively would generate an added $133 billion.

That is roughly 10% of  the current annual budget deficit.

But, Democrats, don’t despair. With the unwitting help of Ruth Marcus, liberal Washington Post opinion writer, I have a suggestion for you: revive and increase the marriage tax.

The marriage gap presents a real cost,” Marcus writes.

If current trends hold, within a few years, less than half the U.S. adult population will be married. This precipitous decline isn’t just a social problem. It’s also an economic problem.

Specifically, it’s an income-inequality and economic-mobility problem. The steadily dropping marriage rate both contributes to income inequality and further entrenches it.

That’s because the educated and rich are marrying more and getting richer; the uneducated and poor are marrying less and falling further behind. “Family structure,” Isabel Sawhill of the Brookings Institution told Marcus, “is a new dividing line in American society.”

As marriage increasingly becomes a phenomenon of the better-off and better-educated, the incomes of two-earner married couples diverge more and more from those of struggling single adults….

It’s not only that those at higher education levels are far more likely to marry — they’re far more likely to marry each other. “Men used to marry their secretaries,” Sawhill observed. “Now they marry the woman they met in med school.”

As a result, Sawhill said, “These two-earner couples at the top are just making out like bandits and these single parents at the bottom have miserable lives. If the single parents were married, their life wouldn’t be so miserable. And at the top, if these high-earning professionals weren’t getting together and forming little collaboratives, they’d be worse off.”

This new marriage gap seems tailor-made for the Democrats’ tax-and-share approach to all social problems. If about half the adults are married, and are getting richer as a result, and half are not and are thus falling further behind, how long can it be before Obama calls for a marriage tax in the name of “fairness”? In fact, he could make it a progressive, graduated tax by including a Graduate Tax: couples where both spouses have college degrees pay more, those who both have graduate degrees pay even more, etc.

Why should some be allowed to make out like bandits while others are condemned to leading miserable lives when their conditions could be equalized, in the name of fairness, by some simple tweaks to the tax code?

ADDENDUM

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Say What? (14)

  1. Linda Seebach December 18, 2011 at 12:07 pm | | Reply

    Or we could just require that every poor single parent get married, to another such. Of course, a lot of those marriages would be between women, but there are already many marriages that are not primarily (or at all) sexual relationships, or marriages where the partners’ sexual attachments are to someone other than the spouse.

    No more random than the assignment of college roommates, which doesn’t work out all that badly, on average. Maybe better than marriages do.

  2. RRRoark December 18, 2011 at 4:02 pm | | Reply

    I would prefer the gummint get totally out of marriage. Everyone’s income taxed individually and healthy adults not classifiable as dependents. That would solve the gay marriage problem also. Because if there are no tax breaks for disparate income adult partners and the gummint isn’t in the business of issuing licenses, I’m sure that some churches would marry anyone to anyone else.

    Of course we would need rather strictly defined laws in reference child support determined by DNA testing to prevent an explosion in welfare benefits. Oh wait that might help solve some other problems too.

    1. kmk December 18, 2011 at 6:02 pm | | Reply

      There are healthy educated adults making the sacrifice to stay home with their children, and even educate them. We figure that we have saved our gummint at least 40K a year (which I could certainly be earning if we put our children in school) for the past 10 years or so , as we are raising 7 upstanding taxpaying citizens who will be paying for the older generations. How about an annual tax of $20 per family whose children attend a public school to offset the cost of diesel for all of the busses?

  3. Mcra99 December 18, 2011 at 4:09 pm | | Reply

    Better yet…why not a federal income card? The card identifies the holder by his level of income. When making purchases, the card dictates the cost of the item being purchased:

    Make $250,000 per year…pay $7 for that loaf of bread; make $25,000 per year…pay $0.50 the same loaf of bread.

    Want an X-Box or 32″ flat screen? Make $250,000 per year….pay $1,000; make $25,000 per year…pay $50.

    It makes perfect sense in the liberal world where the haves subsidize the have nots…no questions asked – just show the card!

    I’m just sayin’……

    1. Steve December 18, 2011 at 7:31 pm | | Reply

      Yes! Ordinary prices are “regressive” since they require a higher percentage of a poor person’s income than they do of a rich person’s. Let’s make all prices “progressive”, and see what happens.

      I keep hearing the Dems say that “the rich” need to pay “their fair share”, which is a hard statement to disagree with. But they never say how a fair share is to be calculated.

  4. Mick Langan December 18, 2011 at 5:25 pm | | Reply

    It appears to be in our interest to have more married people, so why re-institute the marriage tax? Make the breaks larger until the hedonistic ne’er do wells see which side of the bread is buttered. Or not.

  5. R.C. December 18, 2011 at 5:46 pm | | Reply

    There already is a marriage penalty for the poor, of course, if one thinks only in terms of the advantages and disadvantages of being married versus single as a person with dependent children to support. The married mother often loses an amount of government assistance which is greater than the mother’s and children’s shares of a father’s income, were the father to remain in the picture.

    Beyond that, the poor below a certain level have a marginal incentive not to increase their income. A person getting a $35,000 job to replace a $25,000 job will jump a bracket and lose assistance programs to the point that they were better able to “make ends meet” back before the job change.

    The result is predictable: Not everyone does what the incentives reward them for doing, but enough do so that in the end, perverse incentives cause poverty to be more pervasive and intractable than it need be. (That’s “poverty” in an American sense, which even now, in the early years of the Second Great Depression, ain’t, y’know, Africa poverty.)

    One thing that left-liberals and conservatives should agree on, then, is “smooth curve” rate changes and “smooth curve” means-testing for assistance. There really ought not be a radical jump in one’s taxes for making one dollar more than X dollars, because if there is, one naturally tries to make less than X, and that’s a perverse incentive because it either incentivizes reduced productivity, or increased dishonesty.

    But the one idea that left-liberals will apparently never grasp is the long-term impact of cultural norms and habits and the ability of government policy to destroy or solidify those norms and habits.

    It’s quite simple:

    1. When folks are undecided about how to live their lives, they generally drift in the direction of cultural norms and habits;

    2. Some cultural norms and habits produce better outcomes than others;

    3. It is therefore a compelling interest of government to incentivize those cultural norms and habits where doing so is practical and falls within the proper constitutional scope of government’s legislative authority;

    4. Two-biological-parent child-raising is known beyond reasonable doubt to be preferable both for reducing poverty among mothers and children and for improving adult success of those children in various ways (mental health, academic success, economic success, avoiding incarceration);

    5. There therefore ought to be strong incentives to promote two-biological-parent child-raising.

    Here’s what I’d call serious incentives:

    For the oldest minor dependent child in a household, you get a $4000 deduction and a 1% reduction in the household tax bracket rate per biological parent living in the household. For the second-oldest, it’s $3500 and 1% per biological parent in the household. For the third-oldest, it’s $3000, and so on down. (4th: $2500, 5th: $2000, 6th: $1500, 7th: $1000, 8th: $500, 9th: No more deduction but the 1% reduction for the bracket still applies.)

    There is in such a system a strong incentive for marriage and its continuation…which is a good thing, because as it turns out that’s better for society.

    Don’t like those numbers? Fine, come up with your own; I’m not saying it’s a perfect Eden-generating plan. But the overall idea is that incentives matter. It’s not the handouts that help the poor in the long run; it’s the way the rules of the system they live under help them make better decisions which reduce poverty.

  6. willis December 18, 2011 at 6:07 pm | | Reply

    ““Men used to marry their secretaries,” Sawhill observed. “Now they marry the woman they met in med school.”

    Now of course, with women increasinly being the boss, they aren’t about to marry their secretary. Women don’t marry beneath them. They demanded it, they fought for it, now they have it.

  7. Delayna December 18, 2011 at 6:49 pm | | Reply

    The usual government solution to poverty would follow your suggestion: reward behavior that leads to more poverty, and punish behavior that leads to less. The War on Poverty had been a series of retreats, punctuated by ritual execution of elite troops. Generals who stagger back from seeing their entire force massacred are lauded as “compassionate” while those who win back a little ground are castigated. Expect poor people to get an education or a job? You’re worse than Hitler! I am beginning to suspect that the government doesn’t want more people prosperous. Maybe I’m just crazy.

  8. K T Cat December 18, 2011 at 7:18 pm | | Reply

    Very nice post! I threw you a link and went a bit farther in a blog post of my own.

  9. Lee Reynolds December 18, 2011 at 8:04 pm | | Reply

    Once again we see one of the ways in which healthy and functional adults differ from the diseased and dysfunctional. Smart, emotionally healthy individuals marry and raise a family. Foolish and emotionally diseased individuals do something else.

    Why? Because people are not all made the some. Some people are better than average, and some people are worse. The leftist dream of equality is an impossibility in a species whose members vary from one another so dramatically. Human beings self-stratify based upon their abilities, inclinations, virtues and vices.

    Winners win because of who they are. Losers lose for the same reason. Were you to somehow take all the losers and all the winners and make them trade places, the vast majority of each would soon find their way back to their previous perch.

    Character is destiny. Who you are is what you become.

  10. richard40 December 20, 2011 at 11:48 am | | Reply

    I thought we already had a marriage tax. The way the deductions work if both spouses earn similar moderate incomes, it works out that they do better living together not married, so they can file as seperate individuals. The only way being married does not lose on taxes is if one spouse earns much more than the other, or if both spouses earn so much that they are in the top bracket even individually.

  11. Cobra January 2, 2012 at 5:50 pm | | Reply

    Lee Reynolds writes:

    “The leftist dream of equality is an impossibility in a species whose members vary from one another so dramatically. Human beings self-stratify based upon their abilities, inclinations, virtues and vices.”

    I disagree. You’re taking the Nature side of the Nature vs. Nurture argument to the extreme. Environment is a huge determinant, IMHO. The Trailer Park Tot will struggle to attain what the Trust Fund Baby disregards. The average Housing Project Teen doesn’t have anywhere near the same resources, support network or foundation as the Gated Community Debutante. Talent must be harvested. Intellect must be focused. Skill must be practiced and perfected with discipline and guidance.

    “When Gallup asked a sample of Americans in 1998 whether the gap between the rich and the poor was a problem that needed to be fixed, 52 percent said yes, while 45 percent regarded it as an acceptable part of the economic system. Today, those numbers are reversed: Only 45 percent see the gap as in need of fixing, while 52 percent don’t. Again, Democrats are the outliers: 62 percent of them want it fixed, versus 24 percent of Republicans and 47 percent of independents.”

    I would love to see the demographics of this polling, because in reality, according to a new Employment Policy Research Network report from MIT Professors Frank Levy and Thomas Kochan:

    “….general upward mobility — the heart of the American Dream, in which each generation lives better than the last — is increasingly under threat for many Americans. As illustrated by the paper’s earnings statistics, the average 40-year-old man with a high school diploma earned more in 1980, adjusted for inflation, than a similar man earned in 2009. At the same time, top incomes grew sharply and the highest-earning 1 percent of households — those who earn more than $370,000 annually — now take home about 21 percent of the nation’s total income.

    http://web.mit.edu/press/2011/social-compact.html

    Perhaps a media controlled by the Top 1% doesn’t like to mention reports like these, to keep the illusion of an “American Dream” alive alongside Santa and the Loch Ness Monster.

    R.C. writes:

    “The result is predictable: Not everyone does what the incentives reward them for doing, but enough do so that in the end, perverse incentives cause poverty to be more pervasive and intractable than it need be. (That’s “poverty” in an American sense, which even now, in the early years of the Second Great Depression, ain’t, y’know, Africa poverty.)”

    The survival instinct is more powerful than greed, IMHO, and international poverty is relative. There’s probably not a sane American adult who would work for .80 cents an hour making Ipods in Chinese Apple factories ringed with suicide nets.
    But apparently in China, you can survive making .80 cents an hour.
    Why is this relevant to the conversation?

    “According to the “Survey Report Chinese Marriage Status of 2010” jointly disclosed on Dec 15, 2010, by the China Association of Marriage and Family Studies, the Committee of Matchmaking Service Industries under the China Association of Social Workers, and China’s leading marriage service provider Baihe.com, about 70 percent of women interviewed said that housing, stable income and some savings were the main requirements for marriage. From the report, we can see that housing is in the priority position of the factors. Even the few “feminine extremists” believe an apartment is the standard of judgment in whether the male can be responsible and provide for his family.”

    http://www.chinadaily.com.cn/opinion/2010-12/23/content_11746124.htm

    Well, look at that. Even in China, romance without finance is a nuisance, but it underlines a universal point. It doesn’t make one “foolish or emotionally diseased” to not get married if you can’t afford to, or do better single, and given that…

    “50% percent of first marriages, 67% of second and 74% of third marriages end in divorce, according to Jennifer Baker of the Forest Institute of Professional Psychology in Springfield, Missouri. “

    …Just what are my conservative friends trying to say here, besides the veiled classism assertions, that is?

    —Cobra

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