Response to Tip’s Post
Hello Tip,
Great post on the issue of the marriage penalty. You have clearly discussed what marriage penalty is and stated if it clearly exists. I agree with you that marriage penalty still exists. However, not all couples suffer the sting of a marriage penalty. The new tax law that took effect in 2018 eliminated the so-called “marriage penalty” for most households. For other households, no so much.
The term marriage penalty refers to the additional tax implications for those who tie the knot (Rayznar, 2016). I agree with you that, after marrying, some couple will suffer the sting of a marriage penalty, while others may enjoy a marriage bonus. There are often unavoidable federal and state tax implications for married couples. The amount of taxes married couples pay depends on their base income, the credit or deductions they use and state residence (Rayznar, 2016). Before the “Tax Cuts and Jobs Act”, which took effect in 2018, many taxpayers faced higher federal and state tax bills after marriage (Beebe, 2019). The Tax Cuts and Jobs Acts adjusted the tax brackets to eliminate the issue of marriage penalty for all but the highest earners. However, it is important to note that there are some parts of the tax code that still cause couples to continue to suffer the sting of the marriage penalty.
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Marriage comes with a lot of implications. The Biblical verse you have quoted clearly acknowledges that marriage comes with some troubles. In the Bible, Paul said that “those who get married will have trouble” (1 Corinthians 7:28, New Living Translation). Although Paul was not referring to the issue of taxes, it is important to note that troubles come in many forms. I agree with you that Paul’s caution certainly rings true in this example. According to Paul, single people devote themselves to God more than married people. Arguably, marriage comes with some implications, but marriage founded on religious principles is better equipped to weather them. Overall, you have composed a great post of the issue of the marriage penalty.
Peer Response #2
Response to Mila’s Post
Hello Mila,
Great post on the issue of whether farmers ought to claim their losses as a hobby loss or on a Schedule F. I agree with you that farmers in the United States have many tax benefits. This includes depreciation deductions, crop insurance proceeds, and fuel and road use, among many other benefits. Despite all these benefits, farmers may still face experience losses. How farmers claim these lose depends on several factors.
In the U.S., farmers can claim losses as a hobby loss or on a Schedule F. You have clearly differentiated these types of loss claims. A hobby loss is a non-deductible loss incurred as a result of carrying out an activity for pleasure and not for profit (Neuschwander 2018). On the other hand, farms that operate as a business or for-profit are required to file Schedule F (Neuschwander 2018). The question of whether the client should claim the losses as hobby losses or on a Schedule F depends on whether the client is operating the firm for pleasure and not for profit or as a business and for profit. If the farmer is running the firm for pleasure, then he or she must claim the losses as a hobby loss. If the farmer is running the farm on a for-profit basis, he or she must claim the losses on a Schedule.
2 Corinthians 9:10 (ESV) states, “He who supplies seed to the sower and bread for food will supply and multiply your seed for sowing and increase the harvest of your righteousness.” Farming is an act of faith, and thus farmers should continue producing farm produce to serve people. This is regardless of whether they do it for pleasure or business. Whichever the case, farmers must comply with government laws and regulations.
References
Beebe, J. (2019). The Marriage Penalty after the TCJA: Effects on High-and Low-Income Households and the Elderly. Baker Institute Report , 3 .
Neuschwander, D. L. (2018). Profit Motive Key in Hobby Loss Cases. Journal of Accountancy , 226 (3), 52.
Ryznar, M. (2016). A Practical Solution to the Marriage Penalty. Pepp. L. Rev. , 44 , 647.
