The bachelor tax – what it costs in taxes to be single

Taxation is a strange, mixed-up world.

Are you in a funky state with bad tax policy?

At a broad level, offering benefits for marriage solves political problem, married people tend to vote so need to be catered to. It also solves societal one, marriage tends to be better at extremely broad strokes for society. Married Couples live longer, commit less crime, kids in married households generally have better outcomes and so forth. So politicians in United States decided to incentive it.

Because married couples form a household and it allows them to share child care and work as they see fit.

If you tax individuals, you're encouraging both to earn the same amount of money.

If you tax couples, it encourages the higher earner to keep working, thus you have a higher overall productivity.

Thus you have freedom and higher overall productivity in favor of shared tax burden.

Try 500k both

To put it another way, eliminating the marriage differential[1] in all cases requires giving up progressive marginal rates or community property.

Which one do you want to give up?

[1] The current US brackets and deductions taxes some married couples more than comparable pairs of individuals, taxes some less, and is basically a wash in other cases. It's easy to move couples between the first two groups and you can move some of each to the third, you can't move all of them.

Switching tax brackets is a categorical change which needs to occur before there is a difference.

It makes me terribly sad each and every year. And each and every year I have to reconsume stories about the man that flew his plane into an IRS building, and the guy from NJ that threatened an IRS agent on a voicemail and then called back immediately and apologized but still got 12 months. Every year I make a decision to not throw my life away. And every year it's a really tough decision.

Hard to value that though.

Without a prenup, and most don't cover earnings during your marriage anyway (They're hard to keep updated yearly), you're giving away half in California, which can be over $1M if you're a diligent saver and investor. Then if your spouse is REALLY nasty, you'll owe her spousal support that can be thousands per month, depending on your income (and income POTENTIAL), for the rest of her life (after 10 years of marriage in CA).

Any cost savings are completely nullified by divorce if you're a high earner and almost never make sense. Don't get married for tax savings, marry for other reasons and have the most iron-clad prenup you can afford and get your partner to agree to. I promise you, your future self will thank you.

If people find this interesting, I will open-source and allow contributions to support other country's tax systems.

Currently the cost of raising children is privatized while the benefits are socialized.

The most astute observation I've seen on the topic is that in a capitalistic system in which monetary value is assigned to everything, the value of children is deeply negative and therefore they are not desirable. By having children, most couples are putting their stability, wellbeing, and long-term prospects on the line. The opportunity cost is staggering. If more children is the desired outcome, that tradeoff must cease to exist, and a lousy $2k isn't anything remotely close to that.

How's everyone enjoying their tariff rebate checks? Any servicemembers care to share how they spent their warrior dividend?

I just found the idea of the ring being paid for by the IRS funny.

I have hatred for life.

(also the fact that biggest beneficiaries of SALT are states either high housing costs and these states tend to be Democrat leaning states made it easy for Trump to cap the SALT deduction in his 2018 tax cuts)