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The tax code is made for tradwives. Here’s how much it punishes dual-earning couples

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Putting your taxes together, you may have noticed that many details of your personal life change how much you pay. Are you married? Do you have kids? Do you pay for child care, or does one parent stay home?

These details and their accompanying policies are, essentially, the tax code’s answer to the “mommy wars” between working mothers and their stay-at-home counterparts, providing at least a little of something to everyone: better tax brackets for this, a credit for that. It can be hard for an individual taxpayer to figure out what they owe–and even harder for the concerned citizen to figure out how it all adds up across society and which types of families receive the most favorable treatment.

In a April 2024 report for the Manhattan Institute, I took a shot at adding it up. I wrote a computer program that simulates how different types of families are taxed over the course of their lives. With admittedly generous simplifying assumptions (such as that these couples live their entire lives in the year 2022, Groundhog Day-style), it illustrates how tax burdens change with marital status, children, and income.

My findings suggest that the status quo is particularly friendly to traditional—yet no longer quite so common—households with a breadwinner and a homemaker, and particularly neglectful toward couples with kids in which both partners earn similar incomes.

Why do single people pay the most in taxes?

Take someone who earns the median wage for a full-time worker for each age from 23 to 65, which averages out to around $55,000 a year. As a single individual, they’ll pay about $200,000 in income taxes over the course of their life. But if they add a non-working spouse, that drops all the way to $125,000. This is sometimes referred to as the “breadwinner bonus”—and it happens because the tax brackets for married couples are (except for the very rich) twice as large as the brackets for singles.

That same feature of the tax code implies that when two people with equal incomes marry, they at least won’t be punished, since their tax thresholds double along with their combined income. This is true for single individuals, but not for single parents.

Single parents lose head-of-household status if they marry, and can also lose the Earned Income Tax Credit, the phase-out thresholds of which do not double with marriage. Two adults with incomes in the bottom 25th percentile and two kids, whose combined incomes average around $65,000, provide a dramatic example: They pay about $100,000 in lifetime income taxes if they’re married, and only $30,000 if not.

Ultimately, the tax code does a few things well. It reduces taxes for people with lower incomes through progressive rates, for parents in general through the Child Tax Credit, and for seniors by excluding a lot of Social Security income from taxation. But while couples with a breadwinner and single parents benefit from further help, dual earners with kids are quite often treated worse than if they were unmarried.

There are many ideas for addressing these biases. Some have suggested giving secondary earners a special tax break.  Others, especially on the left, have long argued in favor of aggressively subsidizing child care (though this subsidizes both dual earners and single parents–basically anyone without a spouse or other family member who is available to watch kids).

My idea, however, is this: Tax people as individuals rather than on their joint income, as many other countries do, and which–thanks to the long-term rise of women’s work and wages–would now benefit about half of Americans. Allow the higher-earning spouse to use the head-of-household status if children or an adult unable to work are present in the picture.

This would mean a tax hike for couples with a breadwinner and a tax break for dual-earning couples with kids. But to be clear, I don’t suggest this out of a desire to shape others’ behavior or enmity toward breadwinner households: I’ve even spent time as a stay-at-home dad myself, though I still worked part-time. I say it because this change would address unfairness in the current system.

Robert VerBruggen is a fellow at the Manhattan Institute.

A version of this story originally published on Fortune.com on April 15, 2024.

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The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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Hundreds of New Yorkers spent hours waiting in line for free eggs. All 100 cartons were gone in less than 10 minutes

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Hundreds of people lined up Friday morning at three sites in New York City, some arriving more than an hour early, for the opportunity to snag one of the nation’s hottest commodities: a dozen free eggs.

People were bundled up against the windy cold as they stood outside a Harlem restaurant, patiently waiting to be handed a carton. Less than 10 minutes later, the 100 cartons were gone, leaving many empty-handed.

“I heard from the news that they will be giving around, like, 1,500 eggs, or something like that. OK? And I just came because I needed some eggs, and then I’m waiting here in the line, and I don’t see anything,” said Jackeline Tejava, who was in a line that stretched around the block. “They say that the eggs are gone, but it hasn’t been not even more than 20 people, so I don’t know what happened.”

Egg prices hit a record high last month as the U.S. contends with a bird flu outbreak, which has forced poultry farms to slaughter more than 168 million birds since 2022.

Trying to find eggs on grocery store shelves in New York City can be hit or miss. When they are in stock, they can be pricey.

Friday’s giveaway was organized by FarmerJawn, a 128-acre (52-hectare) Pennsylvania farm that’s focused on providing organic food to underserved communities. FarmerJawn held other egg giveaways Friday in Brooklyn and Queens. The group also handed out free cartons in New York last month.

“We’re doing this egg giveaway because, as food producers, we believe it’s our responsibility to support the communities that support us,” the group said in a written statement. It partnered with a local butchery and a upstate New York farm to organize Friday’s events.

“Food is medicine, and everyone – especially the often-forgotten middle class – deserves access to it,” Farmerjawn said.

Other organizations, including churches, have recently held egg giveaways in New York and elsewhere around the country, including Las Vegas, Chicago, Philadelphia and Richland County, South Carolina.

The U.S. Department of Agriculture expects egg prices to rise 41% this year over last year’s average of $3.17 per dozen. A carton of eggs in New York City can often run twice or three times that amount, depending on the store.

Marion Johnson, who waited more than two hours at the Harlem giveaway but didn’t get a free carton, said she can’t afford eggs.

“They’re so expensive,” she said. “This is not fair. … They know everybody gonna be on line like this.”

This story was originally featured on Fortune.com



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SEC to lose about 500 staffers to buyout, resignation offers

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About 500 staffers at the Securities & Exchange Commission have agreed to leave the agency in response to its $50,000 buyout and deferred-resignation offers, according to people with direct knowledge of the matter.

The divisions of enforcement, exams and the office of the general counsel will experience some of the more significant departures, the people said, asking not to be identified discussing non-public information. The number may climb even higher as additional people accept the buyout ahead of Friday’s deadline for the $50,000 incentive. Some of the departures may not take place until later this year. 

The total represents about 10% of the roughly 5,000 employees at the agency. Some former staff have expressed concern that the agency will be unable to handle a financial crisis, should one arise, given the talent drain.

To qualify for the buyout offer, employees must have been on the agency’s payroll before Jan. 24. They must voluntarily leave through resignation, transfer to another agency or immediate retirement. If they accept a voluntary separation agreement and return to the SEC within five years, they must pay back the incentive in full.

An SEC spokeswoman declined to comment on the departures.

More cost cuts are on the agency’s agenda. The SEC plans to eliminate the leases for its Los Angeles and Philadelphia offices. The General Services Administration has also explored ending the Chicago office’s lease, though that could come with a significant financial penalty, Bloomberg has reported.

Regional offices oversee a hefty portion of exams and enforcement work. The most-senior positions at regional offices have also been cut, though the individuals in those roles aren’t being forced out.

The SEC cuts have been criticized as inconsistent with the administration’s mission to reduce federal-government costs.

“The Trump administration may claim that all agencies should be reduced in size by a roughly similar margin, in effect sharing proportionate reductions,” Columbia Law School professors John Coates, John Coffee Jr., James Cox, Merritt Fox and Joel Seligman wrote in a blog post last week. “But this ignores one extraordinary fact about the SEC: It consistently has generated more in fees than in operating expenses.”

Reuters reported earlier Friday that hundreds would leave.

This story was originally featured on Fortune.com



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NASA makes rocket scientists use an app to list accomplishments

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NASA is rolling out a “weekly accomplishments app” for agency workers to track their productivity, a step toward complying with one of Elon Musk’s government-efficiency demands.

“Today, we will debut a new tool for the “Five Things” request,” Acting NASA Administrator Janet Petro told employees in an email Friday seen by Bloomberg News. “This secure, internal tool makes it easier for you to track and share the incredible work you do each week.”

Musk, who is leading the Department of Government Efficiency under President Donald Trump, surprised agency heads last month when his team sent emails to more than two million federal employees requiring them to submit their weekly achievements over email, or face losing their jobs. 

The order was part of the billionaire’s brash approach to overhauling the government — an initiative that has sown uncertainty at NASA and beyond. 

The move was widely rebuked across the government with some cabinet secretaries telling their employees to ignore the email, raising concerns that the emails could compromise national security or classified information. The White House also clarified that workers wouldn’t be fired if they didn’t respond and directed them to follow the instructions of their agency heads.

Federal workers have continued to receive weekly prompts to submit their five bullet points and instructions for how, or if, to respond have varied widely across agencies.

The weekly accomplishments app, as Petro described it, will streamline reporting and give workers a “running record” of their contributions over time.

The email comes days after NASA shuttered two offices and eliminated jobs to comply with Trump’s executive orders. The layoffs come at a time of uncertainty for NASA as it awaits the confirmation of Trump’s nominee for administrator, Jared Isaacman, who spent an undisclosed sum of his own money on two SpaceX missions and whose company, Shift4 Payments, has provided Musk’s space company with $27.5 million in funding.

In her note to the agency’s civil servants, Petro added that she will continue to submit weekly accomplishments and activities of all agency employees to the US Office of Personnel Management. 

“This tool will provide a straightforward way to share your work as part of that process,” Petro said.

This story was originally featured on Fortune.com



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