Switching tax brackets is a categorical change which needs to occur before there is a difference.
A couple each home earns x, each gets taxed on x. Each gets the tax free allowance on the fist £12.5k of the annual income. Each gets the full basic rate slice before they hit higher bands etc.
If one of the couple earns 2x and the other zero, then only one can use their tax free allowance and they get one slice of the basic rate band etc.
They still have the same pre-tax income for the same household.
Personally I think people should be allowed to opt in to sharing taxable income.
What fraud?
> You will then get the argument of "why should I be taxed more because I'm single"?
You might, but its a dishonest argument. You are taxing households together. You are giving each individual the same amount of tax free income and the same amount in the lower bands.
It is already possible for self employed people to do this by making their spouses a partner or shareholder in the business or similar. This is just extending the same rights to employed people.
And as for not seeing how a tax cut based on 2 people living together could not be abused, you must be very short sighted.
CRA is even pretty careful about letting a spouse claim capital gains income; it's always attributed back to whoever earned the original principal (outside of inheritance). I think the only way around this is to formally "loan" the spouse their investment money, but you have to charge them interest and the interest is of course income to you.
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.
Taxation is a strange, mixed-up world.
Are you in a funky state with bad tax policy?
While there's numerous places where MFJ < 2x Single due to various marriage penalties, and even more numerous places where 2x Single < MFJ due to the shared tax bracket space below the 37% bracket....
there are very very few places where MFS > MFJ. They exist, but you have to be in particular situations like one person having disproportionately more debt and on an income based repayment plan, or similar.
There are of course many situations where 2x Single = MFJ = MFS if it's just two similar income W2 employees with no edge cases going on.
(Once you're married, filing 2x Single is obviously not an option)
Due to progressive taxation, we tax two people who make $50,000 less than someone who makes $100,000 which is where the tax savings come from.
If people find this interesting, I will open-source and allow contributions to support other country's tax systems.
Hard to value that though.
I’d like solid numbers of how much I’m overpaying to do the work the government refuses to (sheltering folks, ensuring nutritious foodstuffs).
I just found the idea of the ring being paid for by the IRS funny.
Don't make me enter the number or click the button every time.
Just give me a slider for both incomes and show me the result right away.
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.
$2K or even $20K is meaningless for a parent making $100K or more.
Kids have a negative value to a professional class member.
If you engage in agriculture or some similar activity, a child as old as 10 can be a helping hand in some way or the other. No surprises that Amish farmers have a high birth rate.
I think for many the desire is there, but sufficient de-risking is required for them to be comfortable with acting upon it.
I talk to lots of people in SV, heads of design, engineers, as well as folks from around the world that I work with, from San Diego to Argentina and Chile. So many 20-30 year-olds have told me they are never having kids. Life is too fun, and they want to see the world. But training the next generation is hard work, and it's easy to do a terrible job. We want to incentivize people to have kids and be great parents. But that requires voluntary sacrifice, which is a hard sell.
If I hadn't had kids, I could retire now. As it is, I'll be lucky to be able to work and get a job so I can earn for the next couple of decades so I have enough to retire.
There's not really a solution that doesn't involve heavy restructuring in one place or another.
How's everyone enjoying their tariff rebate checks? Any servicemembers care to share how they spent their warrior dividend?
Currently the cost of raising children is privatized while the benefits are socialized.
However, other part of it is entire economic structure is designed to grow or line must go up. Easiest way to make sure line goes up to have more consumers and since many Western Countries have less consumers, this means entire economic system is going to have a reckoning which those in power don't want.
All of your ancestors during a thousand million years have had this obsession.
Are you sure it's not you who are weird?