"There is a way to set up your fiscal and welfare institutions that avoids both marriage penalties and marriage bonuses, though this approach is rarely mentioned in the US policy discourse. The solution has three pieces to it:
- Tax all income personally. In our current system, Medicare, Social Security, and Unemployment taxes are assessed on each individual’s personal income while the federal income tax is assessed on tax units that combine spousal income and then apply different rates based on whether an individual is filing singly, jointly, or as a single parent. We should change the federal income tax so that it is assessed on each individual’s personal income just like Medicare, Social Security, and Unemployment taxes are. This would make it so that tax situations do not change based on marriage.
- Provide welfare benefits personally. Welfare benefit eligibility should also be based on the circumstances of specific individuals not families. Unemployed people should get unemployment benefits regardless of how much money others in their family or household earn. The same for disabled people, elderly people, children, and so on. Some of our benefits already work like this, but others do not. By providing benefits to individuals based on their personal circumstances, you make it so that their benefit situations do not change based on marriage.
- Eliminate means tests. Welfare benefit eligibility and levels should be based on an individual’s current status (e.g., whether they are unemployed, disabled, on leave, a student) and, for income-smoothing benefits, their prior earnings. As with (2), this ensures that family composition does not end up affecting benefit eligibility.
Of course, this just describes the ideal form of the universal social democratic welfare state. This should come as no surprise."
https://jacobin.com/2025/01/universalism-welfare-states-marriage-medicaid
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