what is so called "The Marriage Tax Penalty"

The marriage penalty in the United States refers to the higher taxes required from some married couples, where spouses are making approximately the same taxable income, filing one tax return ("married filing jointly") than for the same two people filing two separate tax returns if they were unmarried (i.e. filing as "single", not "married filing separately"). The percentage of couples affected has varied over the years, depending on shifts in tax rates.

The source of this increase in taxes has its roots in the progressive tax-rate structure in income-tax laws, that is, a higher income pays a higher rate of tax. In such a context, income averaging is advantageous to the taxpayer. E.g. two married persons, one making $80,000 and the other making $20,000 in a particular year, will pay a lower combined tax than they would if both had an income of $50,000 in the same year and filed as two single people.

In the U.S., income averaging (i.e., the "married filing jointly" status) was advantageous to a married couple with disparate incomes. To compensate for this somewhat, the U.S. provided a higher tax bracket for the averaged income of a married couple. While income averaging might still benefit a married couple with a stay-at-home spouse, such averaging would cause a married couple with roughly equal personal incomes to pay more total tax than they would as two single persons. However, this disparity has been largely eliminated under current tax law.