Monday, March 31, 2003

Bogus Statistic Alert

In this article from the Tax Foundation, I found the following claim: “Married Couples File Less Than Half of All Tax Returns, But Pay 74 Percent of All Income Taxes.” The point of the article was to demonstrate that the tax code penalizes marriage. But this statistic strikes me as incredibly misleading, for at least two reasons.

First, setting aside the complications raised by income-earning dependents, a tax return for a married couple filing jointly represents twice as many taxpayers as a tax return for a single filer. Thus, if tax returns from joint filers constitute 50% of all tax returns, they probably represent close to 67% of all taxpayers – which is not far from the 74% of all income taxes they pay.

Second, marriage is strongly correlated with age: the older you are, the more likely you are to be married. Know what else is strongly correlated with age? Income. As people get older and accumulate more experience, they tend to earn more. It follows that the correlation between marriage and income is probably also high, in which case it makes perfect sense that married people would be paying a larger share of income taxes, even if the tax code included no marriage penalty.

It may well be true that the tax code penalizes marriage. But the statistic above utterly fails to prove that point.

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