Steve Marcus/Reuters/File
Shantel Jackson, the fiancee of undefeated welterweight boxer Floyd Mayweather Jr. of the U.S., shows her engagement ring in Las Vegas in 2011. High-income married couples will get hit with a new 'marriage penalty' this year, except those who have a nonworking spouse.

A new marriage penalty for the rich

New Medicare payroll tax could cost high income couples as much as $1,350 in extra tax. But some couples will get a tax break.

Our new Marriage Bonus and Penalty calculator, despite all its Valentine’s Day finery, ignores the new 0.9 percent Medicare payroll tax hike buried in the 2010 health law. The extra levy affects only a few high-income couples but in very different ways. Lucky couples will collect marriage bonuses of up to $450. But those less fortunate—if anyone making $250,000 can be considered less fortunate—will incur marriage penalties of as much as $1,350 in additional Medicare tax.

The culprit? The income thresholds for paying the tax. The new levy equals 0.9 percent of wages above unindexed thresholds—$200,000 for singles and $250,000 for married couples. Because the threshold for couples is less than double that for singles, the tax imposes a marriage penalty on couples with two high earners but gives a bonus to those with a high earner and a low- or non-earner.

Consider the simplest case of a penalty: each spouse earns $200,000. If they weren’t married, they wouldn’t owe the new tax because their separate earnings don’t exceed the singles threshold. As a married couple, their $400,000 combined earnings are $150,000 over the threshold for couples and they owe 0.9 percent of that in tax—$1,350.

The penalty stays the same if their earnings grow. As long as each has earnings above $200,000, they’ll pay $1,350 more each year. Marriage takes away $150,000 of the total exclusion the tax provides for two single workers.

Who are the lucky duckies for whom marriage will cut the tax? Couples with one spouse earning more than $200,000 and the other earning less than $50,000.

Consider again a simple case: a woman making $250,000 and her stay-at-home hubby. Unmarried, she owes the new tax on $50,000—$450. Married, that tax bill goes to zero. The savings derives from the $50,000 additional exemption that comes with marriage. That bonus shrinks if the husband starts working and goes away entirely if he makes more than $50,000.

It would be easy to get rid of those penalties and bonuses—just tax earnings separately for each worker the way we do with other payroll taxes. As long as the tax applies to a couple’s total earnings, there have to be either bonuses or penalties or both.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

QR Code to A new marriage penalty for the rich
Read this article in
QR Code to Subscription page
Start your subscription today