David Cameron, the leader of the Conservative Party, set off a considerable debate in Great Britain on marriage when he recently claimed "Families come in all shapes and sizes and they all need support [because]…married couples stay together longer. Therefore, there is a very strong case for supporting marriage [in the tax system]. Children do better if their mother and father are both there to bring them up". The Bush administration is also very pro-marriage, and in the past has considered using the tax code to encourage marriage.
Virtually all studies show that children brought up in intact families do better at school, and have fewer drug and delinquency problems, than do children whose parents divorced or never married. However, that evidence alone does not tell us whether or not children of divorced parents would have done poorly even if their parents had stayed together, perhaps because parental fighting creates an unpleasant atmosphere. Good evidence on the effects of divorced parents on children is much more elusive, but the limited material available confirms that divorce makes children worse off. This is partly because one-parent families have less money and time to spend on children, and because these families tend to live in worse neighborhoods. Moreover, the process of witnessing parents going through a divorce may also harm children.
A little evidence also indicates that being brought up only by mothers is harder on boys than girls, probably because boys benefit more when their fathers live with them. Since single mother families are so common among blacks, this finding has been used to help explain why young African-American males do a lot worse than young African-American females in school performance, delinquency, and on many other measures. Different outcomes between boys and girls of growing up in families without fathers suggest that this rather than which parents continue to live together is what harms children.
Even if having two parents in a household is beneficial to children, it is far from clear whether marriage per se benefits children compared to having parents who live together without being married. A further question is whether all two parent households, or only households with two biological heterosexual parents, benefit children? The statement by Cameron at the beginning of my discussion says that 'families come in all sizes and shapes and they all need support'. I am persuaded that children raised by two gays or lesbians do worse than children raised by heterosexual parents, although the evidence is far too limited to be certain about this.
The tax code of the United States require joint filing by married couples. This imposes higher taxes on couples when both work than if they were single partly because two low-income earners who marry might have too much income to qualify for the earned income tax credit, and would receive less if they do qualify. The progressive tax structure also penalizes two earner married couples, especially when their earnings are similar. Hundreds of other provisions also impose a marriage penalty, although they are mainly minor ones, while many provisions give small subsidies to married couples when only one of them works.
Any tax penalty imposed on two earner married couples has become more important during the past several decades because these couples are much more common. An obvious solution to a marriage penalty from joint filing would be to require, or at least allow, married couples to file separately and split their incomes. Separate filing is now the norm in virtually all other member countries of the OECD.
Subsidies to marriage could be easily implemented by allowing larger per person standard deductions to married couples than to single persons, but it is not obvious that the tax code should be manipulated to try to alter these family arrangements. Arguments based on the external effects of parental divorce and other separation decisions on children are often not applicable because the vast majority of parents do love their children. These parents take account of their children's interests in deciding whether to separate, and in their other decisions. Mainly for this reason, all countries leave the care of children to parents, except in extreme cases of neglect by parents.
Moreover, since justifications for marriage subsidies based on the positive effects of marriage on young children would not apply to couples without children, or with grown children, should subsidies be given to such families? Furthermore, suppose it were shown conclusively, the available evidence is mixed, that young children are worse off when both parents work. I doubt if there would then be much support for additional taxes on two-earner families, although the logic of doing this is the same as that for providing marriage tax subsidies.
Explicit marriage subsidies (or penalties) ,or taxes on two-worker families, will not have large effects on either marriage or the number of married couples where both work unless the subsidies (or penalties) were much bigger than would be politically feasible. But even if the tax system could be used effectively in these ways, it involves too much social engineering over choices by adult men and women. Except in extreme cases of child abuse and neglect where parental choices have sizable external effects on children, government interventions in family decisions tend to cause more harm than do good.
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