Just say no to joint tax filing

Congress introduced the joint return in the 1940s, to ensure families with equal incomes paid equal taxes. Back then, nearly everyone got married. Couples typically married young, had kids early on, and stayed together for the long term. When marriage equalled family, the joint return made sense.

Today, only half of American adults are married. Kids today may live with married parents, step-parents, or cohabiting parents.  More than a third of kids live with single parents.

But the tax law seems to be stuck watching reruns of "Leave it to Beaver" while the rest of us have long since moved on to "Modern Family."  

Other countries have already updated their tax laws to reflect the new reality. Most developed nations have adopted individual filing. In countries like Canada and the U.K., every person -- married or unmarried -- pays taxes on his or her own income.

It may be tempting to, well, romanticize the joint return, to see in it a symbol of a shared life. But the joint return doesn't reliably reward marriage. Instead, it generates arbitrary tax penalties and bonuses, depending on how much each spouse earns compared to the other.  

The Supreme Court will rule later this year whether the federal tax law should recognize the marriages of same-sex couples. A favorable ruling would mark a critical victory for marriage equality. But the joint return, with its random marriage penalties and bonuses, is a pretty lousy gift to mark the occasion.

Personally, I'm fine with the changing American family. My own modern family includes married, divorced, remarried, and never-married couples. But even if you think that America would be better off if more people got married and stayed that way, you shouldn't put your faith in the joint return. A true pro-marriage policy would start with individual filing as a base and then add marriage incentives provided on equal terms to all married couples.

About the author

Anne Alstott is a professor of tax law at Yale.

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