Pro-Child, but Anti-Marriage

By Edwin S. Rubenstein
Volume 28, Number 2 (Winter 2018)
Issue theme: "Taxpayers Fund Illegal Aliens - The Earned Income Tax Credit Scam"

EITC payments ramp up dramatically when children are born. But married parents often receive a far smaller beneft than single or cohabiting parents with similar incomes. The marriage penalty occurs when the combined earnings of husband and wife push them into EITC’s “phase-out” income range—from $23,930 to $50,597 for a married couple with two children in 2017. Every additional dollar of income within that range reduces EITC payments by 21 cents.

If a childless full-time minimum wage worker marries a minimum wage worker with two children, they suffer an EITC marriage penalty of nearly $1,800 compared to what they would have received if they remained single. If they each have two children, they stand to lose nearly $7,000 in EITC payments upon tying the knot.

In 1979 73 percent of children lived in married couple households; in 2016 only 65 percent did. While many cultural and demographic factors play into this trend, the fraction of children living with married parents declines most dramatically during economic downturns, or exactly when EITC eligibility is on the rise.

About the author

Edwin S. Rubenstein, a regular contributor to The Social Contract, is president of ESR Research, economic consultants. As a journalist, Mr. Rubenstein was a contributing editor at Forbes and economics editor at National Review, where his “Right Data” column was featured for more than a decade. He is the author of  The Earned Income Tax Credit and Illegal Immigration: A Study in Fraud, Abuse, and Liberal Activism.