A ceremony, cake, gowns and tuxedos, and your 250th time hearing any Bruno Mars song. It’s the American wedding. Half of adults in the US are married. If all goes well, this half will receive from their partner a lifetime’s supply of love, understanding, and tender kisses. Uncle Sam, not wanting to be left out, also likes to confer his blessings in the way of tax, insurance, and social welfare benefits.
This would all be well and good – Uncle Sam loving love – except that lower income, less-educated, and non-white adults get married at a much lower percentage than do their white counterparts. This means marriage, despite contributing to the happiness of millions, helps to widen income and education gaps in America.
Unmarried adults with incomes – whether combined or single – under $75,000 are more likely than those with greater incomes to state that lack of financial stability is one of their main reasons for not marrying.
As of 2015, 65% of adults ages 25 and older with four-year college degrees were married. For those with no education beyond high school, a 50% marriage rate. A similar disparity is found in race and ethnicity. 54% of white adults 18 and older are married. For hispanic and black adults? 46% and 30%, respectively.
The financial perks from the US government missed out on by those who haven’t entered into a legally binding union of two people can be substantial.
Our tax code, for instance, favors married couples by allowing them to file jointly and increase their deductible income. Using the nifty ‘Marriage Bonus and Penalty Tax Calculator’ from the Brookings Institute’s Tax Policy Center reveals a tidy sum of savings for a married couple filing jointly. For example, if one spouse earns $40,000 in a year and the other $65,000, the calculator shows that the total taxes paid would be $12,528. Earn the same as an unmarried couple and those two will end up paying a combined $835 more.
Married households are also exempt from gift taxes between one another. Each US citizen has a lifetime gift and estate tax exemption totaling $5.43 million. This means that over the course of a lifetime, any person can receive gifts or property up to that amount without having to pay taxes on it. If someone receives more than that over the course of their lifetime, they’re subject to a transfer tax of 40% of the amount they’re over. The IRS’ rule is that any gift that exceeds $15,000 towards one individual is considered a taxable gift and thus would be counted against the lifetime total. So, if one member of an unmarried couple is paying for more than 50% of household expenses and that total amounts to over $15,000, Uncle Sam considers this a gift from one lover to another and the partner on the receiving end must file a gift tax return. Married couples, in all their resplendent joy, are exempt from all of this.
The government’s wedding presents can also continue well into a married couple’s golden years. Our social security system gifts married couples with the ability to claim either their own benefits or spousal benefits under their spouse’s earnings. What this means is that if one half of a couple didn’t pay into social security for at least 10 years – the required amount to be able to receive benefits – that spouse could receive social security payments worth up to 50% of their partner’s entitlement. Essentially, just by virtue of marrying someone else, a person could receive social security benefits despite not having paid in.
For those Americans who are single and don’t want to be, shouldn’t that pain be enough?
It’s time the US government finds ways to allow all individuals to equally access these benefits, whether they are married or not.