Story Idea: It May Pay to Stay Single

For Working Poor, It May Pay to Stay Single

It literally doesn't pay for the working poor to get married, and actually costs them precious money in the form of lost tax credits. This according to two prominent professors—Claude Renshaw, professor emeritus of accounting, Saint Mary’s College and Ken Milani, professor of accounting, the University of Notre Dame. They researched the 2008 tax consequences of two individuals and their dependents and found it literally paid to stay single. Tragically, studies show that the lack of two married parents in a home can contribute to poverty, illegitimacy, crime, inadequate education and other socioeconomic challenges.

Here’s some of what the accounting professors discovered: A single parent earning $21,000 with two children would receive an earned income credit and child tax credit of $5,460. Say that same parent is living with, but not married to, another single parent of two children who earns the same amount.  Their combined income is $42,000. Unmarried and filing their taxes separately, they would receive a total of $10,920 in earned income credits and child tax credits. If they were to marry, and file together (listing four dependent children), they would receive only $3,400 in earned income credits and child credits. So it would cost them $7,520 to be married.  To make the situation worse, this "penalty" will occur every year, adding up in time to a huge amount!

Several years ago there were efforts by lawmakers to reduce the marriage penalty, but the changes overlooked the most at-risk sector of our society: Families headed up by the working poor. The professors are encouraging Republican and Democratic leaders to revisit the issue, though it is a political hot potato. If you "remove" the marriage penalty by lowering the credits for single taxpayers, you invoke the wrath of those who would say you're "raising" taxes (by reducing their credits) on people who can least afford it. On the other hand, if you raise the credits for married taxpayers to the point where getting married offers the same tax result as being single, you've got a budgetary issue - where is the money to pay these additional credits going to come from?

Media: If you are interested in this story idea, contact Gwen O'Brien, director of media relations, at gobrien@saintmarys.edu or (574) 284-4579.

About Saint Mary’s College: Saint Mary’s College, Notre Dame, Ind., is a four-year, Catholic, women’s institution offering five bachelor’s degrees and more than 30 major areas of study. Saint Mary’s College has six nationally accredited academic programs: social work, art, music, teacher education, chemistry and nursing. Saint Mary's College ranks among the nation's top 100 liberal arts colleges in U.S. News & World Report's 2010 annual survey. Founded in 1844, Saint Mary’s is a pioneer in the education of women, and is sponsored by the Sisters of the Holy Cross.