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Jabus and Kelsey are a married couple with no children. Each earns $120,000 per year, and their combined household adjusted gross income is $240,000. Anthony and Caitlin, who are married as well, also have $240,000 in combined household adjusted gross income and no children. However, Caitlin earns all of the income; Anthony does not work.
a. Use the 2012 tax rates for married couples filing jointly1 to compute how much income tax each couple owes. Assume that both take the personal exemption and standard deduction.
b. Does either couple pay a "marriage tax?" Does either couple receive a "marriage benefit?" (Hint: To answer this question, you will need to look up the 2012 tax rates for single individuals and calculate combined tax liability.)
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