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The Tax Treatment of Married Couples and the 1981 Tax Law

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  • Daniel R. Feenberg

Abstract

Currently U.S. Federal Income Tax schedules do not maintain marriage neutrality, that is, tax liabilities depend upon marital status. This paper shows the extent and distribution of the departure from neutrality both under current law and the new (1981) tax act. The new tax law establishes a secondary earner's deduction of 10% of secondary earner's wages (up to 3U00 dollars). The child-care credit is also liberalized. Analyses of the revenue, welfare and labor supply effects of these provisions are also given.

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  • Daniel R. Feenberg, 1982. "The Tax Treatment of Married Couples and the 1981 Tax Law," NBER Working Papers 0872, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0872
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    References listed on IDEAS

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    1. Lawrence B. Lindsey, 1981. "Is the Maximum Tax on Earned Income Effective?," NBER Working Papers 0613, National Bureau of Economic Research, Inc.
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    3. Daniel R. Feenberg & Harvey S. Rosen, 1983. "Alternative Tax Treatments of the Family: Simulation Methodology and Results," NBER Chapters, in: Behavioral Simulation Methods in Tax Policy Analysis, pages 7-46, National Bureau of Economic Research, Inc.
    4. Feldstein, Martin S & Taylor, Amy, 1976. "The Income Tax and Charitable Contributions," Econometrica, Econometric Society, vol. 44(6), pages 1201-1222, November.
    5. J. A. Hausman, 1980. "The Effect of Taxes on Labor Supply," Working papers 254, Massachusetts Institute of Technology (MIT), Department of Economics.
    6. Boskin, Michael J. & Sheshinski, Eytan, 1983. "Optimal tax treatment of the family: Married couples," Journal of Public Economics, Elsevier, vol. 20(3), pages 281-297, April.
    7. Rosen, Harvey S, 1976. "Taxes in a Labor Supply Model with Joint Wage-Hours Determination," Econometrica, Econometric Society, vol. 44(3), pages 485-507, May.
    8. Hausman, Jerry A, 1981. "Exact Consumer's Surplus and Deadweight Loss," American Economic Review, American Economic Association, vol. 71(4), pages 662-676, September.
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