The Fair Tax Act of 2005, Part XVIII
Today I am covering the definition of the Monthly Poverty Level, used to determine the size of the FCA each month:
`SEC. 303. MONTHLY POVERTY LEVEL.
`(a) In General- The monthly poverty level for any particular month shall be one-twelfth of the `annual poverty level.’ For purposes of this section the `annual poverty level’ shall be the sum of–
`(1) the annual level determined by the Department of Health and Human Services poverty guidelines required by sections 652 and 673(2) of the Omnibus Reconciliation Act of 1981 for a particular family size, and
`(2) in case of families that include a married couple, the `annual marriage penalty elimination amount’.
`(b) Annual Marriage Penalty Elimination Amount- The annual marriage penalty elimination amount shall be the amount that is–
`(1) the amount that is two times the annual level determined by the Department of Health and Human Services poverty guidelines required by sections 652 and 673(2) of the Omnibus Reconciliation Act of 1981 for a family of one, less
`(2) the annual level determined by the Department of Health and Human Services poverty guidelines required by sections 652 and 673(2) of the Omnibus Reconciliation Act of 1981 for a family of two.
If the calculation above doesn’t seem very meaningful, it basically means that if you are married, both you and your spouse get full individual allowances, rather than a partial allowance for a spouse (like your kids would get). This is an attempt to preserve tax advantages for married couples and their families. However, like some others have mentioned, it seems that two unmarried people could get the same amount of money by registering separately, even if they live together. So perhaps this simply keeps married couples on even ground with everyone else, rather than giving them a special advantage for being married.
I would say that it is rather unfair to characterize this as a tax advantage for married people. Rather, it is an attempt to prevent the federal government from paying people to *not* get married. Without the marriage provision, a couple would face the following choice:
1) Get married, and see your prebate decrease by about $1500 dollars a year (about $125 a month)
or
2) Just cohabitate and pocket the money.
Since it’s generally been agreed that paying people not to get married is probably *not* a good move, they put in the marriage provision to put marriage and non-married cohabitation on an even footing.
Yeah that was kinda my point. I suppose I could have worded it better, though. Thanks for reiterating.