‘Harry, Sally’ couples too equal, should have higher marginal tax rates

‘Harry, Sally’ couples too equal, should have higher marginal tax rates

[Ed. – Or something…equally inevitable.]

[I]t is fair to say that When Harry Met Sally tells us something about why the rich have been getting so much richer than everyone else. That’s high-earning college grads marrying each other—which a new paper estimates has increased inequality by 25 percent. …

Marriage has changed, because women’s opportunities have changed. Women graduate more, they work more, and they earn more than they used to. These are all good things. But marriage has also changed, because people want new things from it. Men don’t want a homemaker, and women don’t want a provider. Men and women both want a partner, someone who can help with their emotional and financial needs. So they wait until they’ve settled into their careers to tie the knot, and they try to find someone who’s doing the same. This is also a good thing.

But the consequence of all these good things is more inequality. College grads were already leaving everyone else behind as robots, globalization, and de-unionization have eaten away at less-skilled workers’ wages. But now college grads are marrying each other at higher and higher rates. The researchers estimate that assortative mating has increased our Gini coefficient—where 0 is perfect equality and 1 is perfect inequality—from 0.35 to 0.43 compared to a world where we married like we did in 1960. …

Inequality is a complicated, complicated thing. There are plenty of usual, and some unusual, suspects that have been steadily pulling our income gap further and further apart. It’s hard to say which are causes and which are effects, or if that distinction even matters. But there is one thing we can say for sure.

Harry and Sally are a cute couple, but they should probably be paying higher marginal tax rates.

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