Many people have argued that an income tax should be "marriage neutral," that is, two people...
Many people have argued that an income tax should be "marriage neutral," that is, two people should pay the same total tax whether they are married or they are single. Suppose Amanda earns nothing, Ben earns $60,000, and Cathy and Dylan each earn $30,000. They are all single.
Amanda pays no tax because she has no income. If they all live in a country that has a progressive income tax, which will be higher: the tax that Ben pays or the sum of the taxes Cathy and Dylan pay?
A.
The tax that Ben pays because high-income individuals pay higher income taxes.
B.
The sum of the taxes Cathy and Dylan pay because two people always pay more than one, regardless of income.
C.
Since Cathy and Dylan's income sums to $60,000, these individuals will likely pay the same amount as Ben.
D.
More information is required to determine who pays the higher tax.
Homework Answers
"A"
Ben will have to pay more taxes as the tax rates are progressive i.e. as the income increases the tax rate proportional to that income will increase. Cathy and Dylan are two individuals and their income individually is less than Ben. They will pay less.
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