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The Taxation of Couples

Author

Listed:
  • Felix J. Bierbrauer

    (Center for Macroeconomic Research, University of Cologne, Germany)

  • Pierre C. Boyer

    (CREST, Ecole Polytechnique, Institut polytechnique de Paris, France)

  • Andreas Peichl

    (ifo Munich, LMU Munich, CESifo, IHS and IZA)

  • Daniel Weishaar

    (LMU Munich)

Abstract

This paper studies the tax treatment of couples. We develop two different ap-proaches. One is tailored to the analysis of tax systems that stick to the principle that the tax base for couples is the sum of their incomes. One is tailored to the analysis of reforms toward individual taxation. We study the US federal income tax since the 1960s through the lens of this framework. We find that, in the recent past, realizing efficiency gains requires lowering marginal tax rates for secondary earners. We also find that revenue-neutral reforms towards individual taxation are in the interest of couples with high secondary earnings while couples with low secondary earnings are worse off. The support for such a reform recently passed the majority threshold. It is rejected, however, by a Rawlsian social welfare function. Thus, there is a tension between Rawlsian and Feminist notions of social welfare.

Suggested Citation

  • Felix J. Bierbrauer & Pierre C. Boyer & Andreas Peichl & Daniel Weishaar, 2023. "The Taxation of Couples," ECONtribute Discussion Papers Series 239, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:239
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    References listed on IDEAS

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    More about this item

    Keywords

    Taxation of couples; Tax reforms; Optimal taxation; Political economy; Non-linear income taxation.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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