Marriage Penalties and Bonuses by Race and Ethnicity: An Application of Race and Ethnicity Imputation

Abstract

The Office of Tax Analysis of the Treasury Department imputes race and ethnicity information to its tax model. Applying the imputed information to the calculation of marriage penalties and bonuses for married couples, this paper finds differences in the penalty and bonus rates facing married couples of different races and ethnic backgrounds, and the group differences vary by income. The results show that for couples in higher-income classes, the penalty is more prevalent for Black and Hispanic couples than White couples, and the Black-White differences by income are consistent with the patterns of spousal income splits in the underlying data.