MECEP’S Executive Director Garrett Martin says [the proposal would not penalize married couples for filing jointly] because the tax on earned income is a payroll tax, deducted on individual’s income throughout the year.
“If you have two individuals earning $80,000 a year who are married, then those individuals are already paying Social Security taxes through their payroll taxes that are being deducted by their employer,” Martin says. “And so when they go to file their income taxes, that is already reflected.”
But the language of the ballot question that will go before voters says that it would impose a new tax on individuals and families. The word ‘families,’ says Martin, was added to reflect that the proposal would also tax a household’s unearned income.
“The way the Social Security threshold currently works is that it is only applied to wage income,” says Martin. “And so you can have households that are earning significantly more above that threshold through dividends, investments, and other idle forms of income, that is not being taxed at all.”
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