How The IRS Supports The Gender Pay Gap

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When married women lean in, the IRS pushes back.

There is a persistent gender pay gap, with women earning between 77 cents and 91 cents for every dollar earned by a man, depending on how you calculate it. But there’s more bad news for married woman who buck the trend and earn about the same as their husband: a big tax bill. This is no accident. The system is “a result of policies and presumptions dating back to the early 20th century that deliberately pushed married women to stay home,” according to USC law professor Edward McCaffery.

The concept of a generic marriage “penalty” is a myth. Regardless of income, married couples where one spouse earns substantially more generally receive a marriage bonus. If one spouse earns all the income the couple will “never incur a marriage penalty and almost always receive a marriage bonus,” according to the Tax Policy Center.

It is only in couples where incomes are relatively equal that the tax code imposes a penalty. The more equal the incomes of the two spouses, the larger the penalty will be. A chart from The Tax Foundation illustrates how it all works:


The marriage penalty for spouses who earn relatively equal salaries applies across all income levels. At the low end, a two-income couple earning $7,500 each will pay a $620 marriage penalty, mostly due to the structure of the Earned Income Tax Credit. At the high end, a two-income couple earning $350,000 each will pay a penalty of over $26,000, mostly because the tax brackets for joint filers “begins at less than twice the amount for single filers.”

The structure also disincentivizes a non-working or low-earning spouse, most commonly a women, from seeking additional income due to “the high marginal tax rates that will be levied on the second salary,” the foundation notes. Law Professors Melissa Murray and Dennis Ventry also note the current system “discourages dual-income couples from getting or remaining married, while thwarting efforts to create a more inclusive and egalitarian society.” Indeed, “the average working married mother loses over two-thirds of her salary to taxes and work-related expenses,” McCaffery writes.

According to Murray and Ventry, the penalty for dual-income households “disproportionately burdens underrepresented minorities, who exhibit more equal income ratios between spouses.”