Last month, Representatives Nicole Malliotakis (R-NY) and Michelle Steel (R-CA) introduced the Working Families Tax Cut Act (WFTCA) as part of a broader GOP tax package. The bill, which quickly passed out of the Ways and Means Committee, would temporarily – for 2024 and 2025 – increase the standard deduction for most households. This increased amount would phase out for high-income households. 

The proposed amounts and thresholds vary based on household filing status:

  • Single filers earning up to $200,000 would see a $2,000 increase in their standard deduction (from $13,850 to $15,850), phasing out at 5% thereafter.
  •  Head of household filers earning up to $300,000 would see a $3,000 increase in their standard deduction (from $20,800 to $23,800), phasing out at 5% thereafter.
  • Married filers earning up to $400,000 would see a $4,000 increase in their standard deduction (from $27,700 to $31,700), phasing out at 5% thereafter.

Despite commendable efforts to protect families from the pocketbook pressures brought about by inflation, the WFTCA’s design would ultimately further penalize marriage for many single parents who use the head of household filing status. Marriage penalties occur when two single individuals face a larger tax bill if they get married and file jointly. Research suggests these penalties can undermine marriage and disparately impact  black families.

Republicans have spent several decades reducing marriage penalties in the tax code. This would be a step backward.

A brief history of marriage penalties in the tax code

Congress successfully reduced or eliminated marriage penalties several times since 2000. The Bush tax cuts of 2001 and Trump tax cuts of 2017 both reduced marriage penalties by ensuring the standard deduction and tax bracket thresholds for married couples were double that of single couples for low and middle-income households. Congress also reduced (but did not eliminate) marriage penalties within the earned income tax credit (EITC) by increasing the phaseout threshold for married couples in 2001 and 2009.

A notable exception to this trend is the expansion and maintenance of the head of household (HoH) filing status over time. Single individuals caring for dependents – often children – can file as head of household. HoH filing status has two components: wider bracket thresholds relative to single filers and a more generous standard deduction amount relative to single filers. Congress introduced the HoH filing status, in 1951, in response to marriage bonuses that are long gone. The original reform expanded the bracket thresholds for heads of household relative to single filers without dependents. The value of the standard deduction for single and head-of-household filers remained the same until 1986, when Congress increased it for heads of household relative to single filers as part of the Tax Reform Act that year.

As Robert Orr has explained, HoH filing status is regressive, fails to account for multiple children, and penalizes marriage:

Since married couples do not receive additional tax advantages similar to HoH for having children, a single filer and an HoH filer with roughly equal earnings can be taxed at a lower rate than if they got married.

Relative to the wider bracket threshold provisions in HoH filing status, the more generous standard deduction impacts lower and middle-income households. By increasing the value of the standard deduction for HoH filers relative to single filers, the WFTCA would increase marriage penalties for households with children. Their overall tax burden would be lower, but the penalty they pay for marrying their partner would, in many cases, be higher.

The WFTCA and its alternatives

Table 1 illustrates how WFTCA would impact marriage penalties for several hypothetical scenarios where a head of household filer marries a single filer. It assumes the low-income earner has an annual income of $31,200 ($15/hour, full-time) and the middle-income earner has an annual income of $59,695 (based on the average weekly wage for May 2023). Liabilities shown are based on the standard deduction alone and do not consider other tax credits or exemptions for which households may be eligible.

Table 1. Marriage penalties for hypothetical head of household filers 

The current tax code already imposes substantial marriage penalties for HoH filers, ranging from $710 to $1,040 in these scenarios. Despite providing overall tax relief in all four cases, the WFTCA also increases marriage penalties, ranging from increases of $8 to $172 in these scenarios. Given the benefits of marriage for families with children, Congress should first aim to do no harm. 

Rather than temporarily expand the standard deduction, working families would benefit from reforms that provide them both relief and a strong foundation for marriage and household stability. Congress addressed marriage penalties in the child tax credit as part of the Tax Cuts and Jobs Act of 2017 but failed to index it for inflation. Reversing the erosion of the child tax credit would provide some much-needed pro-family tax relief without worsening marriage penalties. Congress could also continue to chip away at longstanding marriage penalties in the earned income tax credit to target relief to working-class parents. 

Whatever Congress decides to do, families would benefit most if it continued its two-decade trajectory of reducing – not expanding – marriage penalties in the tax code.