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Is Divorce Costing Taxpayers?


The Institute for American Values, the Institute for Marriage and Public Policy, the Georgia Family Council, and Families Northwest has released a new report titled "The Taxpayer Costs of Divorce and Unwed Childbearing."

The study touts itself as the first comprehensive look at costs of divorce to taxpayers on a national level and in all 50 states.

Rather than looking at divorce as solely a social issue, this report claims to look at the bigger financial picture and argues that divorce and unwed childbearing costs taxpayers at least $112 billion per year. In researching family structure, this study found that marriage helps reduce the need for welfare. The researchers glossed over important details and simply assumed that divorce and unwed childbearing leads to poverty, and thus costs taxpayers money through government assistance programs.

The study claims that divorced parents and unwed childbirth also drain taxpayer dollars through criminal justice and education programs. There is also the notion that divorced or unwed parents likely grew up in poverty and have had fewer opportunities - and that they pay fewer taxes due to a diminished income.

Researchers say that divorced and unwed parents cost taxpayers a minimum of $70.1 billion per year on a federal level, $33.3 billion at the state level and $8.5 billion at a local level. The study says that taxpayers in California are hit the hardest, with state and local costs of $4.8 billion per year. However, in Wyoming, state and local costs were estimated the lowest, at $61 million per year.

Apparently this selective research assumes that if single women who live in poverty were to simply get married, approximately 60 percent of them would no longer be impoverished. This, in turn, would reduce the poverty level by approximately one-third. This seems to be the round-about way that researchers for this study determined that one-third of the cost of anti-poverty programs are due to divorce and unwed parents.

Researchers also attributed one-third of the costs of poverty-related crime to divorce. While it cannot be denied that strong, stable marriages are a good thing, the study seems to flip things around when it comes to divorce. In doing so, they missed several important points and their results are disastrously distorted.

The New York Times reported that the Ananat-Michaels result, on which this study was supposedly based, is that divorce financially benefits as many women as it hurts. Additionally, those who see a financial gain after divorce may gain more than those who lose.

One problem with the report is that it simply looks that the women who lose income after divorce. The researchers failed to factor in any of the additional taxes paid by women who see a rise in their incomes after divorce.

Justin Wolfers of the New York Times also points out the amazing fact that these researchers put together a report of the "fiscal" costs of divorce and unwed births without a clear understanding of the tax code.

The U.S. tax system is structured so that if a poor, single mother were to marry a man with a higher income, in most cases the total tax paid by the husband and wife would be decreased. Women who are high earners and marry men who are high earners pay more taxes because of the marriage penalty, but for most married couples, there is a tax break. So in most cases, single women are paying more taxes, rather than robbing us of tax revenue.

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