A (Not Too Taxing) Marriage Penalty Primer

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Afraid to take the plunge? Rather swing than tie the knot? The IRS gives you a great excuse — getting married can raise your taxes. But maybe not for long.

Through a quirk in the tax code (imagine that!) some 21 million married couples pay an average $1,400 more in taxes each year than they would if they had merely shacked up. It's not really a "penalty" per se, but a discrepancy — married couples get a smaller standard deduction than singles: $7,100 per couple, vs. $4,250 per single ($8,500 together). They also move into the 28 percent tax bracket faster, at $42,350, while two singles can earn $25,350 each ($50,700 together) and stay in the 15 percent bracket.

If this all sounds complicated, well, it is the tax code, after all. But take a husband and wife (please!), each earning $30,000 a year. Married, they owe $7,795 in federal income tax; happily divorced, they owe a total of $880 less. The discrepancy is hardest on two-earner couples whose incomes are similar — a single person making $60,000, who pays about $11,599 to the IRS, can actually save about $3,804 by marrying a stay-at-home spouse. But when it comes to couples that need tax relief most, single-earning ones aren't the norm.

The bill that passed the House in February and hits the Senate this week would take $182 billion out of the Treasury over a 10-year period and hand it back to those who choose wedded bliss over cohabitation. The proposal:

Double the standard deduction for married couples to twice that of single filers by 2001, and expand the 15 percent tax bracket from $43,050 to $51,500.

That takes care of those most screwed by the current marriage situation. But the bill also carries some extra goodies, such as increasing the Earned Income Tax Credit by $2,000 to include those who make $32,580 per year, and provide additional relief for households in which one adult is not working. That's the sort of thing that has the White House's back up — most single-earner families are the rich Republican kind that don't need a lot of help. Clinton and many Democrats think the bill cuts taxes too much and for the wrong people, and opponents are hoping the President will veto it.

That'd be OK with Republicans, who are plotting to give themselves something to talk about in Philadelphia by putting it on Clinton's desk just in time for the July 31 convention. After all, this tax cut has a catchy slogan, it's pro-family and at $182 billion a decade it's too incremental for Gore to call it a "risky scheme." A veto means a do-nothing President, a signature means they're a do-something Congress — the GOP figures it's finally hit on a winner.

Clinton senses this. He's got a deal on the table — your marriage tax repeal for my prescription drug deal — that would save him the embarrassment of caving in. But the GOP looks determined to hold out, and the Democratic opposition hasn't had any luck selling its smaller version as a noble alternative. Better to just go along, as February's bipartisan support for the GOP measure indicated. Clinton may decide the same thing this summer.

Which means all you cohabitators and commitment-phobes had better find a new excuse to avoid the altar.