Federal Income Tax Treatment of the Family

The first section summarizes the major features of the tax law affecting families and family choices, and how they developed over time, including the relatively recent introduction of large benefits for children at low and moderate income levels, a reversal of a trend in the past that tended to reduce these benefits through the erosion of the real value of the personal exemptions. It also summarizes the origin of the marriage penalty and marriage bonus. The following two sections first discuss general equity issues, and then apply the ability-to-pay standard to examine how tax burdens vary by family size, across the income spectrum. The final section examines the marriage penalties and bonuses