I am working on family policy ideas that are Outside the Box. This week’s bright idea: graduated tax rebates as rewards for marital longevity.
Marriage is one of the most pro-social institutions. As an institution, it is good for women, very good for men, and the best thing for children. (If you think Jesse Bernard demonstrated that marriage is good for men but bad for women, see Waite and Gallagher’s refutation in The Case for Marriage. If you have never heard of Jesse Bernard, Go Gen X!)
The great benefit of marriage is not primarily economic, nor is it primarily a benefit to the state. However, the state does have strong reasons to support marriage. Among those benefits are economic ones – married people pay more in to the state than they cost, and their kids are much more likely to build up society than to burden it.
So here is my proposal: a state income tax rebate of ten dollars for each year that you have been in your current marriage. Widows and widowers would continue to receive the rebate at the level they achieved when their spouse died. Thus, if you and your spouse have been married ten years, you would get $100 back; at your silver anniversary the state hands back $250; golden anniversaries are awarded $500 back.
And I would make a big deal of it, too. Call them Marital Longevity Awards. Brag about how big a grateful payback the state made to these helpful citizens. Have bureaucrats whose job it is to increase the payout each year. Put the milestone awards in the paper (with the couple’s permission, of course). That is the carrot.
The stick is that only current marriages count. If you get divorced, you go back to zero; if you remarry, you start over again. Cohabiters, even with children, get zip.
At ten bucks per year, this rebate is not a budget breaker. And states reduce their other costs when more people marry and marriages last longer. Even if this investment in marriage cost ten percent of a state’s income tax revenue at first, it could pay that back by increasing the total ‘marriedness” of the state, which produces benefits that ripple through society.
Bright Ideas need a good critical response, so have at it.
[Where did I get the ten percent figure? For example, the average Kentuckian pays about $655 in state income tax, so a couple would pay about $1,300. I don’t know how much married couples pay, but married people generally have higher incomes. Conservatively, let’s say an average married couple in Kentucky, a pretty average state in this regard, pays $1,500 in state income taxes. Being only a little optimistic, we can expect about 3/4ths of them to make it to their tenth anniversary, and 2/3rds to their 20th. At any given moment, most of the marriages that will eventually go the distance are still in their early years, so the state would not be giving a big rebate to each couple. Making an educated guess, let’s say the average payout would be $150 per couple. That is about ten percent of the state’s income tax revenue (though only about 2% of the total state and local revenue from all taxes).]