Just ahead of the deadline for filing taxes, Indiana's Governor Mike Braun is taking a stab at tax reform with a focus on marriage. Through Executive Order 25-51, announced yesterday by the Indiana State Government, Braun aims to alleviate what's known as 'marriage penalties' – the quirks in the tax system that end up costing married couples more than if they were single.
"Marriage is the fundamental cornerstone of strong families and strong communities, and we need to make sure Indiana’s tax and benefits systems aren’t penalizing Hoosiers for getting married," Braun stated, as his office dropped the news right before Tax Day, signaling an intent to rewrite the state's stance on love and money. As reported in the executive order's release, married people tend to earn more over their lifetime, which is echoed by research pointing to the presence of intact families as a key factor in a child's shot at moving upward economically, as per the Indiana State Government.
The governor isn't alone in his concerns. Marriage rates have seen a nationwide slump, and while Indiana still boasts a relatively high ranking in the number of people tying the knot, Governor Braun thinks we can do better, as the current tax system hits married couples with hindrances, like the fact exemption caps are no different for a single filer and a married couple filing jointly.
There are specifics to this bureaucratic romance woes. To cite an example, a single Hoosier can deduct up to $3,000 in rent, but strangely enough, the same amount applies to a couple that decides to file their taxes together – there's no doubling in sight. The same static logic applies to the maximum credit on 529 contributions, which stays pegged at $1,500 regardless of whether the filer is single or part of a twosome, according to details in the executive order.
In response to these discrepancies, the executive order is directing reevaluation across the board. State agencies that handle taxes and benefit programs were instructed to get out their magnifying glasses and provide a thorough report by July next year (for tax policies) and another by July the following year (for benefit programs), along with proposals evicting those unfair marriage penalties from Indiana's policy books.
