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Measuring the Effect of the EITC on Marriage Penalties and Bonuses

Holtzblatt, Janet and Rebelein, Robert

Abstract:

In 2000, the EITC will increase marriage penalties by at least $3.1 billion (10.4 percent) and reduce marriage bonuses by $439 million (1.5 percent). Over half of EITC-related marriage penalties will be attributable to couples who currently are ineligible for the EITC because their income is above $30,000. However, estimates of marriage penalties and bonuses are very sensitive to assumptions regarding a couple’s living arrangements and custody agreements if they do not file joint returns. Recent proposals to provide marriage penalty relief through the EITC are well-targeted to lower-income taxpayers but vary in their ability to reduce marriage penalties.

Citation

Holtzblatt, Janet and Rebelein, Robert (2000), Measuring the Effect of the EITC on Marriage Penalties and Bonuses, National Tax Journal, 53:4, pp. 1107-34

DOI: dx.doi.org/10.17310/ntj.2000.4S1.04