In Gay Marriage Penalty, Virginia Postrel notes the good news for gays whose marriage isn’t recognized by the federal government: they don’t pay a marriage penalty. Postrel’s The marriage tax explains:
How did marriage and taxes form their unholy union? As public-finance economists point out, most Americans want the tax system to do three things: to be progressive, to treat households with the same incomes equally, and to treat all individuals with the same incomes equally, whether or not they’re married.The problem is, we can have any two of those things at the same time, but not all three.
This history explains a lot:
Once upon a time, when the income tax was new, individuals were taxed as individuals. When you got married, you didn’t have to tell the feds. That’s still the case in much of Europe.But in the 1920s and 1930s, savvy taxpayers in community-property states like California, where family law treats a married couple’s income as belonging to both spouses equally, figured out that they could save on taxes by dividing their household income down the middle and having each spouse report half. Since in most cases, the wife earned much less than the husband, the result was to slash the amount of federal tax due from married couples. Federal courts upheld the income splitting.
By the end of World War II, other states were feeling intense pressure to adopt community-property laws to save their residents federal taxes, even though that would mean overturning long legal traditions governing marriage and divorce. To avoid that prospect, in 1948 Congress revised the tax code, allowing all couples to split their income in half for tax purposes.
The new law created the joint return-and a big tax bonus for many married couples. No one was paying a marriage penalty yet, but the tax code was no longer neutral with regards to marital status.
By the late 1960s, however, the growing number of single taxpayers started to notice that they were getting the shaft. Just because a young man had no stay-at-home wife to split his income with, why should he pay a higher tax than a married colleague making the same income?
So in 1969 Congress changed the tax law again, declaring that a single person’s tax liability couldn’t be more than 120 percent of that paid by a couple with the same income.
The greater the marriage penalty, the fewer married women work:
Various tax bills have tinkered with the treatment of marriage since then. But the greatest change occurred as a side effect of the 1986 Tax Reform Act, which left only two tax brackets, 15 percent and 28 percent. This change demonstrated the greatest effect of the marriage penalty: Far more than men or single women, married women act like supply-siders. Cut their marginal tax rates, and they get jobs. Raise them, and they stay home.
[...]
After the 1986 law flattened federal rates, the average marginal tax rate faced by such married women dropped to 38 percent, and they began going to work in dramatically higher numbers. According to a 1995 study by the economist Nada Eissa of the University of California, Berkeley, the percentage of top-income married women who worked jumped from 46 percent to 55 percent-a 19 percent increase. Those who already had jobs increased their hours by 13 percent.