Us tax pros generally say the marriage penalty doesn’t apply at the lower ends of the tax brackets. That’s generally true now, and it was generally true in 1971. A typical middle class couple would not face the marriage penalty.
Example
In 1971, John and Jane are unmarried. John has taxable income of $8,000. Jane has taxable income of $1,000. John’s tax liability will be $1,590. Jane’s will be $145. Combined, that equals $1,735.
Now let’s say John and Jane are married. The tax on a joint tax return showing $9,000 of taxable income is $1,600. There is no marriage penalty at their income level.
($1 in 1971 is equal to $5.67 today. So $9,000 of income is approximately $51,000 today.)
Then as now, the marriage penalty applied mainly to cases where a couple both had taxable income.
Example:
In 1971, John and Jane have taxable income of $8,000 each (equal to about $45,000 each today) for total taxable income of $16,000 on their joint tax return. The tax on $16,000 for a married couple is $3,260.
If they were unmarried and filing as two single people, they would owe $1,590 of taxes each, or $3,180 of total taxes. That’s a marriage penalty of $80, or about $450 in today’s dollars.
Through the years, the marriage penalty would get worse, as we’ll explore in Part 14.