It’s time to eliminate marriage penalties in the U.S. tax code

by Erik Randolph | May 19, 2025

Marriage penalties in the U.S. tax code discourage family formation and upward mobility for low-income Americans.

It’s time to eliminate marriage penalties in the U.S. tax code

This article was originally published at Institute for Family Studies.

The U.S. individual income tax structure and the safety-net assistance system exact financial penalties on married couples, which worsen when children are in the family. The effect of these penalties is the opposite of what public policy should be. Research has established that society benefits immensely from stable and healthy marriages. This article focuses on U.S. Tax Code and restoring the income tax to its primary purpose while eliminating marriage penalties (it is excerpted from section 1 of a two-part policy brief on how to eliminate marriage penalties from the tax code and safety-net programs).

Remove Safety-Net Programs from the U.S. Tax Code

Of the federal and state agencies that run more than 80 federal programs intended to help low-income individuals and families, perhaps the worst administrator is the Internal Revenue Service (IRS) that runs several safety-net programs, including the Earned Income Tax Credit (EITC) that provided $64 billion in cash assistance to 23 million tax filers in 2024.

While many policymakers view the income tax system as an efficient way to dispense safety-net benefits, IRS performance leaves much to be desired. A recent Wall Street Journal article listed the EITC with the second-highest improper payment rate—more than five times the average improper payment rate. The Journal’s article did not reveal anything new. The IRS also runs the program with the highest improper payment rate, the American Opportunity Tax Credit.

When it comes to marriage penalties, the income tax structure is a bad fit for distributing money to needy households. While there are tax filing statuses for married couples, heads of household, and single individuals, there is no option for unmarried couples. Consider an unmarried couple with two children. One partner can claim both children as head of household while the other files as a single person. Or they can split the children as heads of household. Either way, they will be treated differently than if they were married.

Congress could create a new tax filing status to accommodate unmarried couples. However, it may be more trouble than it is worth. Unmarried couples run the gamut in financial and relational commitments, and using tax law to address the various situations is complicated and may be perceived as too intrusive for those who just want to pay their tax liability.

Besides, the IRS is set up for annual returns and refunds, not monthly payments. EITC recipients must wait until the following tax year for their benefits. Monthly payments would give assistance when needed, allow families to properly budget, and would be a more effective way to encourage employment, one of the goals of the program.

The EITC had an advance payment feature that was repealed in 2010 due to poor participation and administrative problems. The system relied on employers making the monthly payments to their employees and then being reimbursed by the IRS, but the Government Accountability Office found IRS procedures to be ineffective with noncompliance rates of 80 percent. Although repealing the advance payment feature eliminated this extreme noncompliance rate, the IRS continues to struggle with taxpayer noncompliance with the EITC program.

Make Income Taxes Neutral to Marital Status

Removing safety-net programs from the tax system would allow Congress to focus on making the income tax marital status neutral. In 2017, Congress was successful in eliminating marriage penalties for single individuals who want to marry, provided they have no children and do not qualify for refundable tax credits.

However, marriage penalties remain for the rest of tax filers. For example, suppose a mom earns $20,000, a dad earns $30,000, and they have two children. Table 1 shows the simple tax liability before tax credits for tax year 2025 assuming that, as an unmarried couple, each parent claims one child and the standard deduction. The tax liability before tax credits is $750 if they live together unmarried but $2,000 if they are married, which means a marriage penalty of $1,250. Even if one parent claims both children, there would still be a penalty.

Time to Eliminate Marriage Penalties from Tax Code-Table 1_Body 1

The example in Table 1 is just one wage combination for a couple with two children. The Georgia Center for Opportunity ran 40,401 wage combinations for this couple if each partner claims one child on their taxes and found that 81% had a marriage penalty. The figure below shows the distribution of the penalties (in red), neutral outcomes (in gray), and the bonuses (in blue).

Time to Eliminate Marriage Penalties from Tax Code-Figure 1_Body 2

One option Congress might consider to eliminate income tax marriage penalties is the flat tax, which treats all taxpayers the same regardless of marital status. The reason can be easily shown using mathematics because the flat tax follows the distributive law of multiplication (see full policy brief for more).

Conclusion

The U.S. Tax Code is ill-suited for running safety-net programs without marriage penalties. Furthermore, the IRS has an awful record of improper payments and noncompliance when it comes to running its safety-net programs. Therefore, an important step to eliminate marriage penalties is to take those programs away from the IRS and give them to an agency that knows how to run safety-net programs.

Download the full policy brief for an explanation of how these other agencies can eliminate all marriage penalties in safety-net programs.

Image Credits: Canva, Georgia Center for Opportunity

Occupational licensing bill would improve access to job opportunities for Georgia’s returning citizens

by Marie Ladino | Mar 13, 2025

Occupational Licensing Reform Bill Post - Header Image

Occupational licensing bill would improve access to job opportunities for Georgia’s returning citizens

Key Points

The Georgia General Assembly has passed a significant new job licensing measure that opens more career pathways for formerly incarcerated individuals.
The bill improves the application process for certain job licenses, creating a clearer and fairer system for returning citizens.
Through the reforms it brings, the bill expands access to steady jobs in industries like health care, education, real estate, and plumbing, among others.

For returning citizens (people who were previously incarcerated), steady employment can mean so much more than financial stability. It can be a powerful source of renewed purpose and belonging within their communities. In fact, research has shown that if returning citizens can keep a job for six months or more, their likelihood of going back to prison drops dramatically. Keeping a job also improves the odds that returning citizens will reconnect with loved ones, especially their children, another step toward preventing recidivism.

That’s where Senate Bill (SB) 207 enters the picture. It was introduced in Georgia’s 2025 legislative session, and the state’s General Assembly passed it in April of 2026. The bill creates an improved application process for individuals with criminal records who want to obtain job licenses in industries like education, health care, insurance, real estate, plumbing, and first response, among others.

The Georgia Chamber of Commerce praised the bill for how it “standardizes the process for reviewing applicants with criminal records, narrows the types of offenses licensing boards can consider, and updates first-offender treatment provisions—all while maintaining important public safety protections.”

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Major Job Licensing Improvements in SB 207

1. Creates a predetermination process and other new procedures to increase fairness

SB 207 creates a predetermination process that enables returning individuals to petition licensing boards for an early evaluation of their eligibility, prior to paying for the necessary education or training. The measure also allows for hearings before applicants are denied licenses due to their criminal backgrounds, and it sets specific criteria to guide those decisions and prioritize due process. Additionally, licensing boards are required to provide detailed justifications for any adverse outcomes and to offer applicants the chance to appeal or present more evidence. The changes help ensure licensing boards operate with greater transparency and fairness.

2. Recognizes the hard work returning citizens have put toward rehabilitation

The bill requires licensing boards to carefully evaluate the nature and seriousness of past offenses, the length of time since the incident, and the individual’s age at the time of the crime. They must also review evidence of rehabilitation, including educational achievements, work history, and community involvement. This holistic approach gives more consideration to the applicant’s growth and emphasizes their present ability to contribute to the workforce. It also gives them a stronger opportunity to overcome past mistakes.

3. Places limitations on the review of criminal records to create more neutrality

Finally, the bill imposes limitations on the types of criminal records that can influence licensing decisions. Sealed records, pardoned convictions, or older minor offenses that don’t directly relate to the license sought will now be generally excluded from consideration. This helps applicants avoid unnecessary penalties for issues long resolved. It also curtails the use of subjective standards, such as assessing “good moral character,” which can perpetuate bias and inconsistencies.

The Impact of Licensing Reforms on Barriers to Employment

While occupational licensing serves an important purpose in certain industries, it often becomes a barrier for individuals eager to pursue meaningful careers. And these barriers hit returning citizens and other low-income workers the hardest. Complicated application processes, licensing fees, mandatory coursework, and unpaid apprenticeships can be insurmountable obstacles for those struggling to make ends meet or to overcome difficult circumstances, past or present.

With SB 207, Georgia lawmakers are breaking down these barriers. They’re building on their recent history of reforming occupational licensing, and they’re strengthening the state’s workforce. Most of all, the job licensing reforms in this bill promise to transform the lives of many formerly incarcerated Georgians for the better—expanding job opportunities, opening doors to financial stability, and restoring hope for a brighter future.

Food stamps program a top opportunity for increasing access to work and savings for taxpayers

by David Bass | Feb 4, 2025

Reforming the Supplemental Nutrition Assistance Program can help families get short-term help without discouraging long-term goals for work and financial independence.

Food stamps program a top opportunity for increasing access to work and savings for taxpayers

Key Points

SNAP’s benefit cliffs discourage work and career growth by abruptly cutting off assistance when recipients earn even modest income increases, trapping families in financial instability and reducing workforce participation.
Proposed reforms aim to eliminate benefit cliffs through gradual benefit reductions, clear exit points, and adjusted benefit levels, encouraging financial independence without penalizing career advancement.
Comprehensive SNAP reform benefits all stakeholders, empowering workers, stabilizing families, addressing labor shortages for businesses, and potentially reducing program costs by $30 billion annually.

Benefit cliffs discourage work and trap families in long-term financial struggles. A new policy solution offers a way out.

The Supplemental Nutrition Assistance Program (SNAP) is one of the largest anti-poverty programs in the U.S., providing over 41 million Americans with critical food assistance in 2024. But for many recipients, a system designed to support often ends up trapping—with significant barriers known as benefit cliffs.

These cliffs occur when small increases in income result in recipients suddenly losing their SNAP assistance, leaving them in a worse financial position for working more hours or earning an income boost. For example, a single parent’s modest hourly raise might lead to a benefit cut that completely offsets their increased take-home pay.

The negative ripple effects extend far beyond individuals and households. Benefit cliffs reduce workforce participation and make it harder for plenty of small businesses and industries to find the workers they need to grow and serve customers.

A new proposal for reform, developed with research by Erik Randolph at the Georgia Center for Opportunity in collaboration with Angela Rachidi of the American Enterprise Institute (AEI), offers a way to dismantle SNAP benefit cliffs and restore the program’s original mission—helping families achieve financial independence and stability.

A new SNAP reform report from American Enterprise Institute and Georgia Center for Opportunity shows how improve access to work and reduce costs to taxpayers.

SNAP’s design discourages career growth among recipients

SNAP is meant to help low-income families put food on the table. But the system unintentionally penalizes those who pursue better wages or career opportunities.

For many recipients, earning extra income—not just large raises but even modest increases as one gains skills or works more hours—means abruptly losing SNAP benefits altogether. Instead of slowly tapering down, benefits “fall off a cliff” as income rises.

This financial disincentive creates a dilemma for households relying on SNAP. While accepting additional shifts or applying for a higher-paying position could signify career growth, it may financially set them back without SNAP assistance offsetting basic expenses.

The economic impact is widespread. With fewer prime-age workers, employers encounter labor shortages, and their ability to operate efficiently is compromised. Workforce productivity also declines when workers are stuck in part-time, lower-skilled jobs rather than advancing to higher economic opportunities. The result is a cycle that makes it harder for families to break free from reliance on public assistance programs.

New SNAP reform proposals offer a way forward

Research by AEI and GCO outlines actionable steps to eliminate benefit cliffs while maintaining SNAP costs close to historical levels. These recommendations include changes to critical factors within the program’s structure to allow for a smoother, gradual reduction in benefits as income rises.

Key reforms involve adjusting the following elements of SNAP’s benefit system:

Adjust participants’ cost-sharing responsibilities. The proposed plan would reduce the benefit reduction rate from 30% to 18%, making it easier for families to transition off benefits.
Cost-sharing should begin as soon as income increases. Right now, deductions delay cost-sharing, which creates benefits cliffs when income limits run out. The new plan is a middle ground, starting benefit reductions earlier but at a lower rate. While it might lower benefits for many families, benefit cliffs are eliminated or reduced.

These structural adjustments effectively close the gap between earned income and benefit loss, removing financial penalties for participants who work more hours or accept higher-paying opportunities.

A win for workers, families, small businesses, and taxpayers

Simplifying and improving SNAP’s benefit structure solves major labor market challenges. For recipients, reforms encourage workforce participation and career advancement, empowering them to climb the economic ladder without fear of a financial setback.

For employers, these changes help restore a steady supply of available workers, addressing hiring difficulties in industries that rely on hourly, shift-based, or entry-level staff. Additionally, SNAP reform creates fiscal balance while allowing the government to save money long term—potentially reducing program expenses by 27% or $30 billion annually.

GCO continues to investigate ways to improve safety-net programs to help families escape poverty, and these recommendations for SNAP are an important piece of those efforts. Employment is one of the most reliable ways to break cycles of poverty, yet benefit cliffs trap too many families in stagnant economic conditions. Eliminating these barriers will strengthen the workforce, stabilize families, and create economic momentum that benefits us all.

Download the full report from American Enterprise Institute and Georgia Center for Opportunity here.

Strengthening Welfare: How DOGE Can Help Open Doors to Work and Opportunity

by Rebecca Primis | Feb 3, 2025

Georgia news, in the news, current events, Georgia happenings, GA happenings

Strengthening Welfare: How DOGE Can Help Open Doors to Work and Opportunity

By Randy Hicks
Originally published on February 3, 2025, in The Well News

As Department of Government Efficiency representatives make their rounds in federal agencies, one of their first priorities should be looking into the U.S. welfare system, which costs taxpayers $1.6 trillion per year.

DOGE representatives will likely have a hard time navigating what program or agency they should start with. As millions of welfare recipients know firsthand, DOGE can’t simply head to the Department of Health and Human Services to solve the problem — the safety net system is not stationed under one agency but rather spans numerous departments that have interrelated purposes but separate and often conflicting operational structures.

Since the adoption of the first federal welfare program in 1935, the safety net has grown into a convoluted maze of more than 80 programs, including 20 that provide education assistance, 17 that provide housing and 16 that offer various social services.

Millions of Americans navigate this complex web each day. They devote hours to calling or visiting multiple departments and sorting through overlapping or duplicate requirements and paperwork — all to make ends meet.

This fragmented setup could be left alone if we think the best we can do for people in poverty is to give them only enough to survive. But if there’s any reverberating takeaway from the last election, it’s that Americans expect their leaders to do everything in their power to tear down barriers to opportunity.

Read the full article here.

Randy Hicks is the president and chief executive officer of the Georgia Center for Opportunity.

Op-Ed: Hidden costs of getting a raise for America’s working poor

by Eric Cochling | Oct 2, 2024

Op-Ed: Hidden costs of getting a raise for America’s working poor

As Congress continues to debate the Farm Bill and the reauthorization of the Workforce Innovation and Opportunity Act, a critical flaw in the U.S. safety net system remains largely unaddressed: benefits cliffs.

Our research, alongside studies from the Atlanta Fed and others, highlights a troubling reality. Many vital safety net programs penalize participants for working and earning “too much” money. These benefits cliffs mean that working poor who receive even a modest raise can suddenly see important benefits like child care, food stamps, and Medicaid dramatically reduced or eliminated entirely.

The loss often far exceeds the raise that triggered it. Compounding the issue, each of these programs is typically administered by different agencies and caseworkers in most states, leaving recipients unable to get a comprehensive view of their financial situation.

Read the full opinion in The Black Chronicle.

Op-Ed: Hidden costs of getting a raise for America’s working poor

by Eric Cochling | Oct 1, 2024

Op-Ed: Hidden costs of getting a raise for America’s working poor

As Congress continues to debate the Farm Bill and the reauthorization of the Workforce Innovation and Opportunity Act, a critical flaw in the U.S. safety net system remains largely unaddressed: benefits cliffs.

Our research, alongside studies from the Atlanta Fed and others, highlights a troubling reality. Many vital safety net programs penalize participants for working and earning “too much” money. These benefits cliffs mean that working poor who receive even a modest raise can suddenly see important benefits like child care, food stamps, and Medicaid dramatically reduced or eliminated entirely.

Read the full opinion in The Center Square.