09 Jan 2012
Traditionally, our society has tried to reward the institution of marriage with social and financial benefits designed to reward people for staying together. And while many families benefit from things like insurance and mortgage guidelines, when it comes to paying taxes they often find this is not the case.
The marriage “penalty” refers to the situation where some married couples actually pay higher taxes than their single counterparts. When spouses are making similar incomes and file one joint tax return, they will likely pay more taxes than if they were unmarried and filed as singles. The number of couples who are subject to the penalty varies as tax rates have varied over the years.
How it works
The root of this problem is the progressive tax structure. Earners with higher incomes pay a higher rate in taxes. So when incomes are joined, they fall into a higher tax bracket. The tax system cannot contain all three features: joint filing for married couples, a progressive tax structure, and separating a couple’s tax bill from their marital status. Income averaging can be advantageous to a couple.
As an example, if one member of a couple makes $80,000 and the other $20,000, they will pay less tax if they can file as if both made $50,000 and filed on their own income. In this case, the joint filing rate is designed to give that couple a tax break over filing separately. They have an advantage in being married.
Before 1969, that couple filing jointly was advantageous to a married couple with different incomes. However, starting in 1969, the USA adopted a higher set of tax brackets for the averaged income of a married couple. Under the new rates, the couple may still benefit with a stat-at-home spouse. But a couple with about equal incomes will pay more than if they filed separately as single people.
Where does this leave you?
Congress has eliminated much of the tax penalty through legislation that was due to expire in 2011, but that tax relief benefit has been temporarily extended. In fact, in today’s economy you even see semi-serious blog posts about whether or not it makes sense to actually get legally divorced just to avoid this marriage penalty. And while no one is seriously advocating this, it does bring light to the fact that this additional tax problem is a serious problem for many married couples.
On June 2, 2010, President Obama released a statement addressing the extension of employee benefits to same sex partners of federal employees. Last year, he issued a Presidential Memorandum stating that the Office of Personnel Management and the Secretary of the State were to extend such benefits as long-term care insurance and expanded sick leave to same sex partners of identified gay and lesbian federal employees. At that time, he also instructed federal agencies to identify other benefits that should be made available to same sex partners. Based on this identification process, in his recent statement, he has instructed all executive agencies to immediately extend more benefits to same sex partners, such as family assistance services, hardship transfers, and relocation expenses. It also requires any new benefits that are made available to federal employees’ be automatically extended to their same sex partners, so long as it is permitted by law.
The President also addressed the shortcomings of his ability to extend the full range of available benefits for federal employees and their opposite sex partners. This ability is limited by Federal law, and, in turn, he urges the legislative branch of the federal government to enact a piece of legislation titled the “Domestic Partnership Benefits and Obligations Act,” which proposes to, among other things, give him such authority.
Maryland’s Attorney General, Doug Gansler issued a similar opinion, which stated that State employees’ same sex partners should be eligible to receive health-care and other benefits that are currently made available to opposite sex partners. This legal opinion was codified by Governor O’Malley’s administration, allowing members of same-sex unions who work for the State of Maryland to enroll their partners in their state employee benefits program.
A New York trial court judge ordered a six weekend sentence to a woman for civil contempt, based on a finding that she had deliberately alienated her children from their father, her ex-husband, in violation of their separation agreement signed at divorce. After an extensive hearing and hours of testimony by the father, the Judge found that there were countless instances in which the wife interfered with the father’s ability to exercise his visitation rights, in addition to harsh attempts to manipulate the children into favoring their step-father over their biological father. The Judge also noted that the mother had made false claims that the father had sexually abused the children. The Judge noted that not only was this allegation completely false and harmful to the father, but also harmed the child by subjecting the minor to an unnecessary investigation by Child Protective Services, all for the mother’s own malicious motivations.
The case is still pending on appeal by the mother, so the appellate court could overturn or reduce the sentence, which in addition to jail time also included thousands of dollars of attorney’s fees to be paid by the mother. But, if the judgment isn’t overruled, this could stand as precedent for other jurisdictions to follow, at their own discretion, sending a message that malicious behavior in child custody arrangements will not be tolerated.
20 May 2010
The New York Court of Appeals has held that, under New York law, a same-sex partner who had not legally adopted her partner’s biological child cannot assert visitation rights. The court determined that only biological or adoptive parents can seek visitation and other rights over a child. The lesbian couple has received a civil union in Vermont, but New York has no civil union law, and they do not recognize same-sex marriage. However, the court did recognize the doctrine of comity require New York to defer to the law of Vermont, which recognizes her as a parent.
In Maryland, Attorney General Gansler issued an non-binding opinion stating that Maryland state agencies should recognize same-sex marriages from other states. This opinion was also based on the principle of comity, i.e. the respect for the laws of other states. A similar case has been winding its way through the Maryland Court System for the past few years, only the courts have been looking it solely as a de factor parenthood case based on exceptional circumstances. It is yet to be seen what effect Gansler’s opinion could have on Maryland courts when faced with such issues.
In Abbott v. Abbott, the Supreme Court was asked to interpret the Hague Convention, specifically the Civil Aspects of International Child Abduction, to determine whether a ne exeat right, i.e the authority to consent before the other parent may take the child to another country, confers a right of custody.
The Abbotts, a British citizen and a US citizen, moved to Chile and ultimately separated. The Chilean courts granted the mother daily care and control of the child, but also gave the father “direct and regular” visitation rights as well as a ne exeat right. Ms. Abbott then removed him from Chile without permission, and fled to Texas, where she filed for divorce, requesting a modification of the father’s rights, thereby attempting to gain full power over the boy’s place of residence. Mr. Abbott filed a motion in the Texas courts to counterclaim, requesting the Ms. Abbott show cause for why the court should not allow the child to return to Chile with Mr. Abbott. The lower courts denied Mr. Abbott’s request and found in favor of the wife, holding that the father had no right of custody under the Convention; his ne exeat right is only a veto right over his son’s departure from Chile, not actually custody rights.
The Convention was adopted to combat international abductions effectuated during domestic disputes. Its primary operating feature is the return remedy, which states that when a child has been wrongfully taken, the country to which he has been taken must order that he be returned to his country of habitual residence. Wrongful removals are those that violate of right of custody.
The Supreme Court disagreed with the lower courts and found that the father’s ne exeat right is consistent with a right of custody. If found that implicit in a ne exeat right is the principle that neither parent can unilaterally establish the child’s place of residence. The Court determined that this right is paramount to the right of care of the child. Thus, though the “ne exeat right does not fit within the traditional notions of physical custody,” per the definition of the Convention, it fully aligns with the definition of right to custody, and not with the “right of access”, as Ms. Abbott argued. Right of access, the Court determined, is a much more limited visitation right, and not a right to ultimately decide where the child may reside, as the ne exeat right is. Thus, the Mr. Abbott had a custody right over the child, and thus the child should be ordered returned to Chile.
Abbott v. Abbott, 560 U.S. ____ (2010).
13 May 2010
The Maryland Court of Appeals affirmed the trial court’s award of indefinite alimony for a wife in the amount of $3,000 a month after a 21-year marriage. The court determined that the wife would not be able to maintain her accustomed lifestyle without alimony and that an unconscionable disparity existed and would continue to exist between the parties without this award. The court found that there was no chance that the wife would be able to make more money than she currently does, considering her education level and age, and thus, based on her current income, she was unable of becoming self-sustaining. By comparing the husband’s disposal income to the wife’s, the court found a great disparity, considering the couple’s assets and in light of the wife being the primary caregiver to the couple’s minor child. In light of the deficit faced by the wife, the trial court looked to the AAML guidelines to determine an appropriate alimony award. These guidelines provide a formulaic approach to calculating the amount and duration for alimony awards. The court, however, did not find this to be determinative, and instead used it for informational purposes only to get a general idea of what an appropriate award would be. By taking into consideration other facts such as the savings that has been demonstrated by the couple during the marriage and the sacrifices the wife made both in raising the children and allowing the husband to further his career. The appellate court found that there was nothing wrong with this approach to determining an alimony award. Though the Md. Fam. Law 11-106 statute governing alimony awards does not include some of the factors the court considered in using the AAML guidelines, the court found that the AAML guidelines were reasonable and the approach used in is line with the goals of the Maryland statute.