I agree most people aren't talking about this. I forgot about it until 2 days ago and I think I am pretty well informed.
The 2- paycheck marriage penalty here infuriates me.
I don't understand how this is a marriage penalty? It is an individual payroll tax - everyone pays the same percentage regardless of marital status.
I guess there's something of a penalty in the fact that if both members of a couple work, and both earn $125,000, both pay the tax in full, but if only one of them works and that one person earns $250,000, they pay only one tax?
I find the other marriage penalties much more baffling though. (Particularly because don't you get the benefits of FICA because you work, and those who don't ever work won't get those benefits? Or am I wrong here?)
I don't understand how this is a marriage penalty? It is an individual payroll tax - everyone pays the same percentage regardless of marital status.
I guess there's something of a penalty in the fact that if both members of a couple work, and both earn $125,000, both pay the tax in full, but if only one of them works and that one person earns $250,000, they pay only one tax?
I find the other marriage penalties much more baffling though. (Particularly because don't you get the benefits of FICA because you work, and those who don't ever work won't get those benefits? Or am I wrong here?)
You are kind of wrong in this.
If you are a SAH spouse, you are able to collect SS on the credits that your spouse earned through FICA. However, the amount will be less than if you worked yourself and earned the credits yourself.
Because the system was set up in the 1930s, it is really based on one income/earner households. I think that if a system were devised today it might be different.
I guess there's something of a penalty in the fact that if both members of a couple work, and both earn $125,000, both pay the tax in full, but if only one of them works and that one person earns $250,000, they pay only one tax?
I find the other marriage penalties much more baffling though. (Particularly because don't you get the benefits of FICA because you work, and those who don't ever work won't get those benefits? Or am I wrong here?)
You are kind of wrong in this.
If you are a SAH spouse, you are able to collect SS on the credits that your spouse earned through FICA. However, the amount will be less than if you worked yourself and earned the credits yourself.
Because the system was set up in the 1930s, it is really based on one income/earner households. I think that if a system were devised today it might be different.
This is where I was going. Why should a spouse be able to collect if they never put in? It's a penalty on 2 income households, I'm not arguing its a true marriage penalty. If both my H and I have to pay it bc we both work, then make one-income household earners pay more if they want their spouse to be able to collect.
It definitely sucks even though I didn't support the "holiday" in the first place.
H just got a 1.5% raise and I am supposed to get a 2% raise in July, so that will help. Unfortunately our health insurance and parking fee will definitely be increasing as well, but we don't know how much yet.
It won't kill us, but the last 3 months we have been in spending spree mode, so we're definitely going to have to go back to living on a budget and saving vs. spending our whole income. I just wonder how many more years people can hang in there without making any progress, if not going backwards.