Working paper Racial Disparities in the Income Tax Treatment of Marriage
Janet Holtzblatt, Swati Joshi, Nora Cahill, William G. Gale
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Although it is generally blind with respect to race, the tax code can create racial disparities when factors that affect tax liability are correlated with race. In this working paper, we provide new evidence on racial differences in marriage penalties and bonuses in the income tax, using data from the Survey of Consumer Finances. Our results support Brown’s (2021) hypothesis that, controlling for income, penalties are more frequent and larger for Black couples than white couples. We link these results to racial differences in income, relative spousal earnings, and the presence of dependents, and examine two policy reforms.

Primary topic Individual Taxes
Research Area Tax rates